How long does it take to improve credit score?
If you’ve been asking the question “how long does it take to improve credit score”, chances are you still haven’t and are still on the lookout for the best tips out there. Credit scores are like grown-up report cards that show your financial worthiness to banks, lenders, insurance companies, and even future employers. Of course, the higher your credit score, the better, although many believe that having no credit score is as bad as having a low credit score.
A higher credit score improves one’s chances of getting a car, buying a house, or opening a business. With a higher and more impressive credit score, the lower your interest rates are when applying for loans, and more. But what exactly is a good credit score?
Here’s a breakdown of credit score groups and its effect on your finances:
300 – 580: the credit application will be approved for the highest, most costly interest rate, if even approved at all.
581 – 650: the credit application will be approved at high interest rates.
651 – 710: the credit application will be approved at moderate interest rates.
711 – 750: the credit application will be approved at competitive interest rates.
751 and up: the credit application will be approved at the lowest interest rates on the market, and lenders will practically WANT to lend to you at this point.
So what’s the fastest way in raising credit score? And if your credit score is below par, how long does it take to improve credit score?
Unfortunately, there is no one-night miracle solution to improving one’s credit score. Fortunately, it doesn’t take a decade to increase one’s credit score. As long as there are no serious black marks on one’s credit report, it will be easy to improve credit score in as little as a couple of months.
Here are a few tips:
1 – Always pay bills on time. Late payments or delinquencies negatively affect your credit score the most. If you’ve been unable to make payments on time due to simply forgetting when you’re supposed to actually pay, consider setting up an automatic withdrawal from your checking account to go to your bills.
2 – Don’t close unused credit card accounts. Hanging on to store cards, gas station cards, etc helps your credit score because having a long credit history proves you’ve been a very diligent debtor and are responsible enough to be able to buy and maintain a credit card balance within reason for that long.
3 – Review your credit report. There is no penalty for checking out your own credit report. So why not make sure to check yours regularly? By doing this, you can immediately clear up any credit report errors as these can very detrimental and the systems to track credit have histrionically had glitches that cause perfectly normal users of debt to suffer adverse consequences – late payments, incorrect credit limits, or even collection items which are not yours.
4 – Get yourself a gas station card. Aside from gas store cards being easier to get than regular credit cards, having the ability to pay small monthly charges in full and on time every month helps in increasing your credit score particularly fast, and it is not an added expense as you would spending the money either way.
5 – One last tip is to use your card as a convenience card, nit a true credit card. This means paying it off every month, because most credit cards charge annual percentage interest rates of more than 20% which can rack up very quickly and leave you buried in debt.,
So, how long does it take to improve credit score?
Again, the length of time it will take to increase and improve your credit score depends. Some people do it in as little as a couple of months while others need more than a couple of years, but by following our simple tips above, it will be easy-breezy.