Credit Repair

An Authentic Way To Build Credit Quickly

You may have come across many credit repair companies that claim to help you build credit quickly. No wonder if you find those claims quite lucrative. But, won’t it be just great if you also know those secrets that those companies use to do such miracles? Here, it is very important for you to keep in mind a few things. First, not all such claims are genuine ones. It means many unscrupulous companies make lucrative claims just in n effort to attract more customers. Such companies are only after your money. They will play some bad tricks and make you a fool. For example, a very common practice is that they simply dispute a large number of entries on your credit report with the credit bureaus. It is important to note that when such a dispute is filed, the credit bureaus remove the disputed entries from the report temporarily, at least until the investigation is complete. This results in a quick increase in your credit score. You feel happy and pay a large sum of money as a fee for the “awesome” services done by the credit repair company. But, the next month you get shocked when you see a sudden decline, a substantial decline, in your credit score. So, beware of such companies. Also, do not try such fraudulent tricks on your own. Following are three very authentic steps that you can take to build your credit worthiness within a very short period of time.

Know The Factors That Affect Your Credit Score

When it comes to preparing your strategies on how to build credit quickly, the first thing you have to do is to be well aware of all those major factors that are taken into account to determine your credit score. There are five such factors.
- 35% of the score depends on your payment history. A long history of on-time payments can help you raise your credit score significantly.
- 30% of the score depends on your borrowing behavior. It is also referred to as debt to credit ratio, which means how much debts you have in your own name and how much credit limit is available to you. A good rule of thumb is to use a maximum of 30%-35% of your total available credit. The higher this ratio is, the lower your credit score will be.
- The length of your credit history makes up 15% of your score. if you have just got your first job and have just started your financial life, you are probably starting from scratch, which means you do not have a credit history. In this case, even if you do not owe any debt, you will have a low credit score. The score will rise as your credit history builds up.
- 10% of your credit score depends on the different types of credit you are using. It means you can raise your score by having a good mix of credit, such as a personal loan, a credit card, mortgage, and car loan.
- The remaining 10% of your FICO score depends on how many enquiries for new credit you are making. If a large number of enquiries have been made during a very short period of time, it is taken negatively and thus adversely affects your score.

Apply Strategies To Improve Your Position On The Above Components

Now, in order to build credit quickly, you will have to prepare and implement strategies that can help you improve your position on the above components. For example, if you are making late payments or making defaults, you will have to look at your finances and work on a strict budget plan (which means reducing your expenses and increasing your income by getting a second job or by working overtime) so that you can get current with your debt payments. When you continue making on-time payments for a few months, you will definitely see a significant increase in your score. As the length of the history of timely payments increases, your score will also increase. You will have to work on other factors also in a similar fashion. So, it is all about adopting a strict financial discipline.

Last, but not the least, it is also important to note that errors and mistakes on your credit report may also result in poor credit score. Therefore, if you are sure that you have done a decent job in relation to the five major factors, as explained above, and still see a low score, you must do a thorough review of your credit report and check it for incomplete or incorrect entries. If you find such entries, go ahead and file a dispute. There is a set procedure that you need to follow in this regard. Correcting those wrong entries will also help you build credit quickly.

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

One Response to “An Authentic Way To Build Credit Quickly”

  1. Macc says:

    Credit Report is a very important document for today, if you want a job or you want a house on rent, your credit report will be a key factor. After all, Credit report reflects your financial status if you want to build your credit quickly then this article can provide you a great help. Hiring a credit repair company should have done very carefully because some companies misguide their customers by providing them wrong information like they promise you to delete all the negative entries from your Credit report, which is impossible. Some points which you have to remember is that credit repair can not be done in one day or two, it takes time to improve your credit. Your payment history and your debts to credit ratio contributes in making the maximum percentage of your credit score. You should mix up your credit; the length of your credit history provides another 15 % to your credit score. If you are just a beginner then you can try by getting a secure credit card because credit history can improve the credit score. Remember one thing never do any enquiry for new credit. By applying these rules, you can repair your credit.

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