3 Fast Ways to Improve Your Credit Score |
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by: Janna Weiss
Credit scores are more important than ever now that lenders have tightened their purse-strings. Experts see signs of improvement on the horizon, but there are plenty of dark days yet ahead. Until the credit crunch eases, you should do everything you can to make sure your credit score will qualify you for the purchases you want to make. Here are three fast ways to improve your credit score, legally and legitimately.
First, the bad news: your credit score will not improve by leaps and bounds overnight. If you have bumps and bruises on your credit history, it will take months or even years to make them go away entirely. Now, the good news: there are steps you can take today that will prevent further damage to your score and make lenders look at your credit applications more favorably.
Become an Authorized User
It’s the old Catch-22 we’ve all experienced: You need credit to get credit. So where does that leave young adults who are trying to build their credit for the first time? Credit prospects can be bleak unless you have a family member who is willing to add you to their credit card accounts as an authorized user. If you can get added, you will reap the benefits of the account holder’s good credit history. (Just be sure that there is a good credit history to be had, because you’ll also face the disadvantages of the account holder’s bad credit history.) This arrangement, called “piggybacking”, has helped many young people establish their credit. Note that FICO’s new credit scoring model still recognizes piggybacking between relatives, but strangers who try it will get little to no reward.
Check Your Credit Report – Seriously
We all know that it’s important to check credit reports when you want to qualify for credit, but you also need to check yours regularly for fraudulent or erroneous charges. The vast majority (79%!) of credit reports contain errors. You don’t want to miss out on a new house or car just because the credit reporting agency made a mistake. Also, by checking your report on a regular basis, you can see which lines of credit have been opened in your name, giving you a chance to stop identity theft early while the damages are still minimal. You can get a free copy of your credit report at www.annualcreditreport.com. The FTC web site contains information about disputing items on your credit report.
Need a Mortgage? Try Rapid Rescoring.
If you do find mistakes, but don’t have time to clear them up before applying for a home loan, you can take advantage of rapid rescoring. This process requires the charges to be errors, and requires you to have proof that this is the case. Bring all the documentation you can to back up your claims, and you can have your credit score recalculated – minus the errors – in just 72 hours. Ask your mortgage broker for more details.
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