Top 10 Ways to Increase Your Credit Score

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If you’re considering applying for a mortgage, a personal loan or a credit card in the near future, then you might be surprised to know that such a simple financial tool as a payday loan could potentially help increase your credit score.

Average credit score in the U.S.

The average credit score in America is 675. Unfortunately banks consider any score above 700 as being ‘good’ credit. If your score is a little on the low side, there are some very simple things you can do to improve it.

Let’s look at the top 10 things you can do to increase your credit score quickly.

1. Accurate Starting Score

You should find out what your exact credit score is before you begin any changes to your financial situation. Once you have a clear picture of where you’re starting from, you’ll have an easier job of knowing what steps to take.

2. Seek Out Errors

Read your credit report carefully and take note of the previous credit applications listed there. Make a note of any entries containing errors or information that doesn’t belong to you.

3. Fix Any Errors

If you have found any incorrect listings on your credit report then write to the major credit reporting bureaus at once. They are required to investigate your claim within 30 days and if the listing you’re enquiring about can’t be verified, it will be removed.

4. Repay Any Overdue Amounts Immediately

If you’ve overdrawn your credit card or missed any repayments on a personal loan, then apply for a payday loan to give you enough funds to catch up those overdue payments at once. Once you receive your next pay, you can repay your payday loan and not have the worry of those overdue accounts hanging over your head.

5. Talk to Your Creditors

It’s important you talk to each of your creditors and let them know precisely what you intend to do. If you’ve caught up an overdue payment, then report your payment at once and ask them to record it on your account.

6. Stop Using Credit

If you’re actively working on increasing your credit score then it’s important you don’t incur more debt. Stop using your credit cards and overhaul your budget carefully to be sure you don’t fall behind on any further payments.

7. Payment Plans

Ask your creditors to negotiate payment plans with you. The object of these plans is to help you catch up any remaining overdue accounts but it can also have the dual advantage of helping you to create healthier spending patterns while you’re learning to live with your new budget.

8. Change Payment Frequency

If you have found any incorrect listings on your credit report then write to the major credit reporting bureaus at once. No matter what your monthly payment is, divide it into equal weekly or bi-weekly portions and pay that new, smaller amount regularly. By the end of the month the bank will have received the monthly payment they wanted, but their computers will register several extra voluntary repayments being made, which helps to increase your credit score. This also has the advantage of making it less likely you’ll fall behind again in the future.

9. Debt Consolidation Loan

In some cases it may be worth applying for a debt consolidation loan to roll your outstanding credit card balances into a new facility. This new consolidation loan should have a lower interest rate than the one you were being charged previously, so you should find your monthly cash flow is a little easier. Even though a new debt won’t look great on your credit report, it will look a lot better than those overdue credit card accounts that showed there before.

10. Don’t Be Fooled

When it comes to increasing your credit score, don’t be fooled by wild claims and outlandish promises. There are credit repair companies willing to offer ‘instant’ credit repair solutions that aren’t always ethical, logical or legal. Be patient and work on your own plans to increase your credit score slowly and surely.