5 Tips to Quickly Improving Your Credit Score while Preparing for a Loan Application
Countless Americans have less-than-spectacular credit scores. The recent economic downturn, late payments on certain credit items and seasonal layoffs are just some examples of reasons why someone’s credit score may be lower than they would like.
The good news is that there are ways to raise your credit score relatively quickly when applying for a loan. “Relative” is the keyword here, as most of these methods can take up to 60 days to be effective.
Let’s explore five essential tips that can improve your credit score while you’re preparing to apply for everything from a personal loan to a home mortgage loan.
Dispute Credit Errors
You are entitled to a free credit report each year from the three major credit bureaus. You should acquire them before trying to do any corrections with regards to your credit.
When you have these reports, look over them for any errors that may be reported on your credit. Old debts, debts with incorrect information and debts you have already paid are among the most common errors.
Dispute these with the appropriate bureaus online. Creditors have 30 days to correct valid errors or they must drop the debt.
Pay Off Your Debts
Paying debts you rightfully owe is one of the quickest ways to raise your credit score. Most creditors will quickly erase any debts they report when you pay them, which in turn allows your score to begin climbing skyward.
Negotiate With Debts You Can’t Pay
If you have debts that you can’t pay, then it’s time to negotiate. Creditors will often settle for less than what they are asking, which in turn gives you a way to remove negative reports on your credit.
Some creditors may even be willing to drop late charges or to work with you if you had previously had an exemplary payment record.
The trick with these things is to get them in writing before you ever pay anything agreed upon in a negotiation.
Responsibly Use Credit
Having a credit card or two can actually significantly improve your credit score. The challenge is using it responsibly in a way that gives you a higher credit score.
In other words, ensure that you pay your payments on time and that you keep well under your spending limits. This will make you look like more like a responsible credit card holder than a red-flagged risk, which in turn will raise your credit score.
Acquire a Mortgage Loan
Mortgages that are paid in a timely manner consistently can make your credit skyrocket. These large loans can significantly increase your credit score while dwarfing any negative marks that you might have.
Depending upon your eligibility, you may be able to obtain a mortgage loan that is easier to come by with no credit or poor credit.
For example, VA mortgage loans are significantly easier for qualified individuals to obtain even when you have poor credit. If you qualify for a VA mortgage loan, businesses like Low VA Rates can help you find lenders willing to form a mortgage with you even if you have lackluster credit.
While “quickly” is relative in the world of credit, increasing your credit score certainly can be done while you’re preparing to take out that next loan. By disputing erroneous debts, paying what you owe and showing that you can be trusted with credit, you can increase your credit score in as little as 30 to 60 days.
Category: Credit Score
Comments (1)
Trackback URL | Comments RSS Feed
Sites That Link to this Post