How to Improve Your Credit Score Fast

The reality is that in most cases, there’s no quick fix to your credit score. When you make a mistake like missing a payment or falling into delinquency, you often just have to rely on time to pass in order for you to get your credit back on the right track. With that said, sometimes there are some relatively quick fixes. Here’s how to improve your credit score fast.

How long does it take to improve your credit score?

It generally takes a couple of months to see improvements to your credit score. But you can definitely improve your credit score in 30 days or less depending on factors, such as when statements close, new accounts report, disputes get resolved, etc.

Anything that happens within 30 days is generally considered “quick” for credit repair purposes. But more likely, rebuilding a credit score is going to take several months to a year (or longer) depending on what is holding your score back the most.

Get a “starter” credit card

Secured credit cards can help out tremendously.

If you have a poor credit credit score, you’ll likely struggle to get approved for many credit cards.

However, there are many credit cards available for people with bad credit like store credit cards, such as the Zales credit card.

You might only be able to get a secured credit card or a card with low limit, but if you successfully manage the card by making on-time payments, your score will begin to improve relatively quickly, depending on what factors are holding you down. Find out more about credit cards for bad credit scores.

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

Get added as an authorized user

Adding yourself as an authorized user to a credit card can be a great way to raise your credit score immediately (relatively speaking).

Becoming an authorized user can improve your credit score by doing these things:

  • 1) Lowering your credit card utilization
  • 2) Improving payment history
  • 3) Increasing the average age of accounts
  • 4) Diversifying your credit (this factor plays a very limited role).

To maximize the benefits of being added as an authorized user, your goal should be to get added as an authorized user to an account that:

  • 1) Has as close to 0% utilization as possible
  • 2) Has flawless payment history and no negative reports
  • 3) Is older than your average age of accounts.

Depending on which of these factors is bolstered by being added to the new credit card, you score may jump anywhere from a few points to up to 20 points. I’ve even seen reports where some scores shot up by 50 points! In my experience, scores don’t improve much more than 20 points, but it all depends on the specific factors of your score that you’re addressing.

It’s really difficult to boost your credit score overnight but you can expedite the benefit of being added as authorized user by requesting the credit card to be expedited (if it’s free) and by activating it as soon as it arrives in the mail. You also should make sure the social security number is added so that it will report to the credit report.

Balance transfer to business credit card

The strategy here is to transfer a credit card balance to a business card because most business card balances to not report to your personal credit report. So while you’re still responsible for paying the balance, it’s almost like that balance doesn’t exist for purposes of your credit report.

A perfect example of this is the American Express Blue Business Plus Credit Card. It’s a business card offering 2X on all purchases for the first year, no annual fee, and best of all 0% APR on balance transfers for a limited time.

You’ll need to have decent credit to get approved for this card. However, if you have a low overall credit limit that has high utilization, this could be perfect for you, since it will effectively wipe away that utilization from your credit score. Again, just make sure that the business card won’t report to your credit report.

Consolidate your revolving credit into an installment loan

This is my #1 trick I offer to people who have high credit utilizations and are trying to learn how to improve their credit score fast. I’ve seen it work wonderfully for many people, too.

This is how this trick works.

Revolving accounts and installment accounts

For the most part, there are two different types of accounts you can have. Revolving accounts and installment accounts. Revolving accounts are going to usually be accounts from credit cards, department store cards, trade/credit lines at retailers, some personal loans, and so forth. Installment loans are typically large loans like student loans, car loans, home loans, etc.

The difference between these two is that revolving accounts directly affect your credit utilization while installment accounts do not. This is very key because your utilization makes up a whopping 30% of your FICO score.

So you may already see what can be done here.

Transfer from revolving to installment

By transferring your debt from revolving accounts to an installment account, you effectively remove your debt from the equation that affects your credit score utilization and therefore can often raise your score substantially if your credit utilization is what was holding you back. I’ve seen people raise their credit scores by 100 points overnight with this method by bringing maxed-out credit utilization down to 0%.  

I generally recommend for people to do this by going into local credit unions or banks that they have good relationships with. If you have a decent score, somewhere in the upper 600s, you probably won’t have a problem getting a personal loan for debt consolidation or just for “personal use.”

Make sure that you’re getting an installment loan and not a revolving line of credit. 

Goodwill letters

Your payment history makes up 35% of your score and is therefore the most important factor in your credit report, so it’s vital to take care of this factor.

If late payments or delinquencies are holding you back, then trying a goodwill letter might be one of the best ways to quickly improve your credit score.

Goodwill letters are short letters you send to the lender explaining to them your situation of why your payment was late. Whatever hardships you were experiencing at the time should be mentioned.  The success rate on these is mixed, but it’s worth giving it a try, since you have nothing to lose.

  • You can read my guide on writing goodwill letters here

If you have a late payment in collections, it’s rare that a collections agency is going to entertain your good will letter. In these instances, it pays to negotiate. I was able to get on the phone one time with a collections agency for a client and get the them to agree to remove the late payment entirely from the report and in exchange for a payment, which was about 40% of the total debt due. Again, this is another route that is met with mixed success and it can also be a little bit pricey, so it’s not for everyone.

However, if you go this route, I suggest you get something in writing from them guaranteeing the complete removal of that late payment from all credit bureaus that they have reported to. Otherwise, it’s your word against theirs.

Get errors removed

An Federal Trade Commission (FTC) report found that 21 percent of a representative group of US consumers found a “confirmed material error” in one of the credit reports issued by the big three credit bureaus. This means that you should also check your credit reports for errors. If you see anything you suspect is not accurate, you should definitely attempt to dispute it.

Depending on the severity of the error, you could see a major change in your credit score.

Final word

Overall, it can be difficult to raise your credit score fast. Often time is the only healer for your report. But I’ve seen these options work effectively to improve credit scores quickly for many people, so I know that they can work if you’re able to give them a try.

What’s Going on with the Equifax Data Breach?

The nation’s oldest credit bureau Equifax recently announced that it suffered a massive data breach (also known as a hack) that compromised the data of up to 143 million American consumers. This is a hack of historical proportions and so there’s a very good chance that you may have been affected.

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What happened?

According to Equifax, this is what happened:

The breach took place from mid-May through July and they discovered the “intrusion” on July 29 (but waited over a month to inform the public). The data accessed included names come vital information, such as:

  • Social Security numbers
  • Birth dates
  • Addresses
  • Driver’s license numbers
  • Credit card numbers for about 209,000
  • Dispute documents with personal identifying information for about 182,000 people
  • Personal information of people in the UK and Canada

The response from Equifax

While the security breach is bad enough, Equifax has had a horrible response to the problem.

Equifax set up the following website for consumers to check if they were affected:

But there are several problems with the website.

For one, it requires you to input the last six digits of your social security number which is what some of the breached data included. So now we’re supposed to trust Equifax with that information after that same information just got hacked?

This is especially problematic given that some have pointed out potential security risks with that website. Moreover, there are reports of people inputting fake social security numbers and names and receiving a message that they were affected by the breach and other reports of the website not functioning properly or as expected, so clearly this website is not performing as it was intended.

If you were affected, Equifax would offer you the option to sign up for a free credit monitoring and identity theft protection called TrustID. The only problem was that the terms and conditions included language that would arguably waive one’s right to any class action lawsuit against Equifax. I had my doubts about the legal enforceability of those terms but Equifax has updated the terms to state that this is not the case and that the arbitration terms apply to disputes related to the TrustID service. (If you signed up for TrustID, I wouldn’t worry about being excluded from a class action.)

And to top all things off, there’s even some evidence to suggest some very shady and possible illegal practices that took place, such as insider trading. Although the senior Equifax executives that traded almost $2,000,000 worth of shares claim they weren’t aware of the breach, many people are not buying that.

Class actions

In the meantime, class actions have been brought against Equifax (one in its hometown of Atlanta) claiming damages under the federal Fair Credit Reporting Act and state statues while another class action is seeking $70 billion in a federal court in Oregon. I have no doubt that Equifax will take some serious hits with these class actions, though I don’t think they’re going to be anywhere near the $70 billion range.

What should you do?

I would suggest for anyone who thinks they might be affected to make extra efforts to monitor your credit reports, credit card statements, and bank accounts for suspicious activity. DOC has some good ideas on how to go about monitoring your credit reports and there are some good ideas here as well so you can look into those. Personally, I’m already pretty vigilant about monitoring my credit reports so I’ll continue to do that and just wait it out to see how this all plays out. This is the type of threat that could linger for months or even years.

Final word

Overall, Equifax has done a horrible job dealing with these issues and has reminded the world and PR teams of how important it is to promptly respond to major problems with reasonable solutions that don’t make the problems 10X worse.

I do think it’s funny that back in the 1960s when Equifax decided to move toward computer systems for storing their data there was widespread outrage due to security concerns. Back when Equifax was known as the “Retail Credit Company,” a 1968 New York Times article stated that, “transferring information from a manual file onto a computer triggers a threat to civil liberties, to privacy, to a man’s very humanity because access is so simple.” Turns out they might have been on to something.

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