Let’s face it, you need a great credit score these days as it not only helps you to get approved for personal loans and credit cards, but it could also impact where you live, where you work, and even how much you pay for insurance.
Given the importance of having a good great score, you might be surprised to learn that the average American currently carries a credit score of 687. While this might be considered ‘good’ for some purposes, it is by no means a guaranteed yes when searching for a new house or car.
However, it doesn’t need to be this way, and here are some ways you can improve your credit score in 30 days. Keep in mind that these tips aren’t just for people with good or great credit and even if you’ve faced some difficulties in the past you can use these tips to boost your creditworthiness.
- Know Your Score
With knowledge comes power and as such the first step to improving your credit score is to know where you stand. With that in mind, you will want to reach out to the credit reporting agencies to pull your history. Doing so does not impact your score and it will help you to identify any errors in your report.
In addition to contacting the credit reporting agencies, you can also get your credit score from the government once a year for no charge. This service was designed to increase awareness among consumers and at the same time is a great way to save money as many credit reporting services cost $10 per month or more.
- Remove Wrong Information
Did you know that close to 74 percent of credit reports contain incorrect information? Given the importance of maintaining a good credit rating, it is shocking that there is some much wrong information floating around.
In some cases, the reporting errors are due to the lag time in collecting information from the credit agencies. While in other instances, the errors are due to confusion about the identity of the person – for example, two people in the same area with similar names and dates of birth.
However, there are also a significant number of cases of fraud and this is usually due to identity theft. Unfortunately, this is a problem which is not going away anytime soon as cybercrime experts have noted that criminals have become more sophisticated in recent years.
- Keep Your Balances Low
This might seem self-explanatory but one of the biggest determinants of your credit score is your usage ratio. This is how much of your available credit limit are you currently using. As such, it makes sense to keep your balances low.
If you are not sure how to do this, then you might want to start by preparing a budget as this will help you to better manage your expenses. Small business owners might even want to take advantage of outsourced accounting services to help manage their expenses. Doing so will ensure that you not only pay your bills on time but also have a better track on when you need to use your credit lines or not.
- Pay for Delete
This is exactly what it sounds like – you pay the credit agencies to delete an entry from your credit report. Doing so can be extremely useful when you have a collection notice with a small balance and you want to get it off your report quickly.
However, pay for delete is not without its risks. For example, you need to get the promise to delete the entry in writing – if not, then you might not be able to enforce the change. In addition, some creditors might not be willing to accept this option as it might violate the terms of their reporting contracts with the agencies, to begin with.
- Watch the Inquiries
One thing many people overlook when checking their credit report is the number of enquires tied to their account. However, this is a big mistake as these ‘hard’ inquiries could be a warning sign that of looming problems.
There are two reasons for this. First, every time a creditor pulls your credit report your score is impacted. As such, you are better served by getting your own credit report for any pre-approvals.
Second, and even more important is the fact that inquiries that you are not aware of could be a sign of identity theft and this means that you want to identify these sources and make sure no accounts are tied to these queries. In addition, you will want to dispute the inquiry with the reporting agency as getting it removed will help to up your score immediately.