How to Improve Credit Score in Five Months

If you’re planning on a loan six months from now, you will need a nifty credit score. This will hasten your approval for the loan you’re aiming for. If you already have a ‘good’ score, don’t be too complacent. You’ll never know your credit blunders in such a short span of time. So while approaching your six months target, you can still do improvements to ensure that your score becomes good to great.

Step 1

Know your credit score. You can get a free copy of your credit report from Veda Advantage and Dun and Bradstreet. Knowing your score allows to make adjustments and improvements to your credit score.

Step 2

Credit card balances should take up no more than 30 percent of your entire available credit. Greater than this figure and you’ll see a significant decrease on your score. Pay off your credit card debt or loans until you reach a desirable level.

You can also increase your credit limit. Open a new account or apply for a new credit card. Open just one though because new accounts decrease your score albeit not heavily. You can also request creditors to increase your limit.

Step 3

Make sure that your other creditors report to credit bureaus. Some may be exempted from reporting your credit but ask them just the same. You’ll never know if they’d say yes. Activate old accounts as well by using them for small purchases. Inactive accounts tend to be excluded from credit ratings but once it’s up and running, even with small purchases, it can significantly add up to your credit score.

Step 4

Make sure to always pay on time. A day late can still mark your history with late payment so make sure this never happens. Set up a reminder on your phone, mark your calendar, or post a note. For a much easier way, you can also set up an automatic payment. Banks and other creditors allow you to do this. This is one of the foolproof ways to avoid late payments.

Step 5

By now your credit score must have been at high and your credit balances on low. So a month before your actual home or car loan, pay in cash just to maintain your credit standing. Use your cards as well but only for small and easily-payable expenses.

Doing these steps, a month at a time, will significantly contribute in making your good score in to a great score. After that, enjoy your new loan!