Credit Repair

4 Steps to Build Credit in Six Months

You just have to demonstrate a significant change in your behavior, the way you deal with your finances, and it should not take more than six months to build credit and achieve a perfect FICO score. Don’t panic even if your score is at the worst level at present. In reality, the worse the score is, the faster it can improve once you start implementing the right strategies. You can do wonderful things within a six month period to give a significant boost to your credit worthiness by using these strategies. However, it is important to note that these strategies will work only if bankruptcy is not on the report.

Get a Clear Picture of Where Actually You Stand

You cannot work out a solution unless you know what the real problem is and what those factors are that are causing this problem. Therefore, before you start implementing your strategies to build credit, the first thing that you have to do is to get your credit report and check all the entries over there, especially the negative ones. The laws in the United States of America allow you to get one free credit report from the concerned agencies at least once a year. If you have already utilized that option, you will have to pay a certain amount of fee and buy the report from an authorized source. Some authorized online sources allow you to track your credit situation in real time. When you use such services, it will become very easy for you to address errors and discrepancies as and when they appear.

Be Aggressive In Paying Down Your Debts

A proven way to give a significant boost to your FICO score is to know aggressively. After all, the monthly payment history makes up to 35% of your FICO score. You do not just have to make the minimum payment. Instead, you have to try to pay as much as possible so that the debts could be reduced much faster. The faster the level of debt decreases, the faster you will be able to build credit. Get a second job, work overtime, cut down your expenses, practice frugal living – do everything you can do to arrange some extra funds and then contribute the same toward debt repayment.

Increase the Ratio of Secured and Unsecured Debt

You also need to implement certain strategies so that the ratio of secured and unsecured debt could be increased. And, the best way to do this is by reducing your unsecured debts, excluding student loans. You may also like to obtain some new secured loans, such as a car loan or a mortgage, especially if you do not already have it. An increased ratio of secured and unsecured debt will result in significant improvement in your credit report.

Keep All Documentary Evidences

Whether you obtain a new loan, make additional payment toward a specific debt, or do something else, make sure you keep all documentary evidences. You may need those evidences anytime. For example, if you find that a certain entry on your credit report is not correct, you can go ahead and file a dispute while attaching the necessary proofs. This will accelerate the process of correction.

Whatever strategies you implement to , you must follow up thoroughly to ensure that all consequent changes are reflecting correctly on your report. If you are consistent in your efforts, you will see some great results within a matter of just six months.

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Posted in Build Your Credit, Credit Repair | 1 Comment »

One Response to “4 Steps to Build Credit in Six Months”

  1. john says:

    The first step you have to follow is to cut down on your expenses and increase your income. The best way to achieve this target can be done through Budgeting. This is the most important factor of our life. If we know what are the areas where we can cut down our expenditure and can save money. Next is to be ready for the repayment of all our debts. I know it is very difficult for any body to repay the debts in a very short span of time but we have to do it very fast, if we want to make our credit score good. Funds can be arranged for the repayment by taking any small loan or applying for a new credit card. We can follow a hard and fast rule of not using the plastic money for shopping or any other entertainment till we achieve our goal. The factor given in the article is very much correct that one should reduce the unsecured debt and try to increase the ratio of secured and unsecured debt.

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