When you need to improve your credit score, you could see an increase of around 100 points or more in as little as six months if you plan everything out accordingly. Improving your credit score takes time and dedication, but there are some tips and tricks you can use to help boost it.
5 Tricks to Improve Your Credit Score in 6 Months
It takes time to build or rebuild your credit score. If you’re not sure just how to go about it, consider these five tips that can help improve your credit in six months:
- Pay your bills on time – Your payment history makes up 35% of your FICO credit score, making it the largest factor. Therefore, paying all of your bills on time each month is the most important thing you can do to improve your credit. Depending on where your credit stands, one missed payment could drop your score by upward of 100 points, so it’s extremely important you keep yourself up to date on all of your obligations.
- Reduce your credit utilization – Your credit utilization ratio makes up 30% of your FICO score. Your credit utilization ratio is the amount of all of your credit card balances divided by the amount of all of your credit card limits. For example, somebody with a $300 balance on a credit card with a $1,500 limit has a credit utilization ratio of 20%. The general rule of thumb is to keep your credit utilization ratio below 30%. So, if your balances are higher than that, paying down your credit cards is going to greatly help you improve your credit score. Ideally, getting your balances down to zero, or as close as you can to it, is going to help your credit the most.
- Become an authorized user – A great way to improve your credit is to become an authorized user on somebody else's credit card account. An authorized user is someone other than the account holder that's added to a credit card. This arrangement allows the authorized user to access the history and positive payment information attached to the account. If you have a friend or family member with a great credit score and a long-standing credit card with loads of history attached, ask if you can be an authorized user on the account. Adding another credit line also increases the authorized user's available credit limits, which should lower their credit utilization ratio at the same time.
- Have your rent payments reported – Another avenue to explore is having your rent or utility bill payments reported to the credit bureaus. Doing so gives your credit file a boost just by including payments you're already making. Our trusted partner will report your rent payments if you sign up here.
- Add a line of credit – Of course, you could also just open your own credit card to accomplish the same – you just wouldn't benefit from the existing history that comes with being an authorized user. Adding another credit card increases your available credit, and gives you another account to make timely payments on. A good trick is to charge one expense that you're already paying every month to the credit card, and then pay it off each month. This keeps the card active and keeps your credit utilization ratio low. If you you could open an installment loan such as a mortgage or auto loan. This is yet another account for you to make on-time payments toward, and it adds diversity to your credit portfolio. Your credit mix – the blend of different types of installment and revolving credit you have – makes up 10% of your FICO credit score, so adding diversity is a plus.
Considering Taking Out an Auto Loan?
If you’re looking to improve your credit within the next six months and you need a car, consider taking out an auto loan. Not only do you get the vehicle you need, but you can improve your credit with each on-time payment you make. You don’t need stellar credit to get approved, either.
If you need help finding a lender to work with, Auto Credit Express can lead the way. We’ve helped get people connected to special finance dealerships in their area for over 20 years. These dealers have the lending resources that work with people who struggle with bad credit, no credit, and even bankruptcy.
To get started today, simply fill out our car loan request form. The process is fast, easy, and free of charge and obligation.