Having bad credit can negatively impact your financial wellness in a variety of ways, but these five tips can help you improve your FICO score quickly. (iStock)
Having bad credit can negatively impact your financial wellness in a variety of ways. It can prohibit you from saving money on monthly loan payments due to high interest rates, and it can also keep you from drawing a line of credit for loans like a mortgage, auto loan, personal loan, credit card, or student loan.
Credit experts, however, can help set you on a path to improving your bad credit or even reaching the coveted excellent credit score. Aside from paying bills on time, establishing a good payment history or keeping credit utilization low, Experian Senior Director of Consumer Education and Advocacy Rod Griffin offers the following five tips on how to quickly boost your credit score:
- Use Experian boost to instantly add points
- Open a secured credit account
- Become an authorized user
- Get a co-signer on a small personal loan
- Have your rent reported
HOW YOUR CREDIT SCORE IS IMPACTED BY HARD AND SOFT INQUIRIES
To check your rates and see what rates you could get on a personal loan, visit Credible to get prequalified in minutes.
Use Experian Boost to instantly add points
Experian Boost allows Americans to share their bank accounts with the credit bureau in exchange for an increase in their score when Experian reports their positive payment history. The credit bureau adds that payment history to your report, which will subsequently increase your FICO score, VantageScore and other credit scores.
This can help improve your credit score and get you closer to achieving excellent credit. It can also establish a credit history for the credit invisible, those who have never used credit and therefore have no score.
For those with thin credit files – five items or less on their credit report – or those with credit scores below 680, Experian Boost increased scores by an average of 19 points, Griffin said. Those with higher credit scores and longer files saw an average increase of 12 points through Experian Boost.
Open a secured credit account
A secured credit card can help you build your credit by backing your credit card with something, rather than taking out an unsecure line of credit. You can usually back it with a savings account or checking account, or put down a small amount of money to borrow against. This allows you to begin building, or rebuilding, your credit score. To see secured credit card options, visit Credible to compare terms and cards.
Become an authorized user
One of the easiest ways to boost your credit score is becoming an authorized user of a credit card. If you have a trusted friend, family member or partner, they can simply add you as an authorized user to their card, instantly adding it and its history to your credit profile.
WHY IS IT IMPORTANT TO HAVE GOOD CREDIT?
Many credit cards will not allow a joint application, but will let you add authorized users.
Get a co-signer on a small personal loan
Lenders will be more willing to lend money when you have a co-signer with positive credit history. By co-signing the loan, they are agreeing to pay the loan, should you be unable to. The addition of a personal loan can also improve your credit mix, which is also good for your score.
HOW TO USE A PERSONAL LOAN TO INCREASE YOUR CREDIT SCORE
However, it's important to keep in mind that if the primary applicant misses a payment or defaults on the loan, it will also negatively impact the credit of the co-signer. Check out Credible to compare rates on multiple personal loans, and see if you qualify.
Have your rent reported
Whether you rent at a single-family residential home or at a large apartment complex, you can talk to your landlord about having your rent reported. This could help you establish a positive credit history.
"We’ve seen that in almost 100% of cases if a person's trying to establish a credit history, [reporting rent] will help them do that," Griffin said. "And it helps, in the vast majority of cases, a person improve their credit score."
YOUR CREDIT SCORE COULD TAKE A HIT AFTER GETTING A MORTGAGE, BUT YOU SHOULDN'T WORRY
Final thoughts
The tips listed above are just a few ways to quickly boost credit scores. Consumers can also pay down debt to keep credit utilization down, or sign up for a credit monitoring service to keep an eye on their credit report and guard against identity theft.
"Boosting your credit score is really all about taking care of your credit report," Griffin said.
Contact Credible to take control of your credit score today, and see options like personal loans that can help you pay off debt or establish a credit history to quickly improve your credit score. Credible can also help with credit monitoring so you can catch errors on your credit report, and protect you against identity theft by sending fraud alerts for unusual credit inquiries or other suspicious activity.
Have a finance-related question, but don't know who to ask?Email The Credible Money Expert atmoneyexpert@credible.comand your question might be answeredby Crediblein our Money Expert column.
