How to Dramatically Increase Your Credit Score (Short Term Strategy)
The Best Way to Improve Your Credit Score
How many times have you tried to find a quick fix to improve your credit score? Perhaps you’ve considered asking a family member or friend to add you as an authorized user on a card. Or maybe you tried closing unused credit cards for a short-term solution. These “solutions” can be very hit or miss.
You can find a lot of so-called experts doling out advice on how to rebuild your credit score. The problem with this advice is that it’s the same thing being told to you over and over again. But there’s one important key to rebuilding your credit that they never tell you: Stop worrying about your credit score and start re-thinking your financial health.
Focus On Changing Your Lifestyle
Your credit score probably took a hit for one or two reasons: You fell behind on payments or you maxed out your credit cards. You’ll need to take a hard look at the root of the problem. Print out the last six months of your bank statements and dissect each transaction. Figure out how much your total spend was on groceries, dining, and entertainment. From here, you’ll be able to figure out where you were overspending.
Changing your lifestyle is the number one most important factor. Once you’re able to get your spending under control, you’ll soon see extra cash flowing into your bank account. You can then use the additional income to finally pay off your debts.
Good Spending Habits Will Help You Increase Your Score
When you’ve established a good spending habit, you’ll eventually see your score improve, and even the way you view your credit score will change during this process. You’ll start to care less about micromanaging your score, and more about paying off your debts. Set up alerts and calendar reminders on all your due dates, and always ensure that you’re able to meet more than the minimum payments. Check your balance frequently to make sure you’re not going over your budget.
The Next Step: Get a Secured Credit Card
Once you’ve become an expert on managing your finances, you’ll need to . Avoid applying for the typical cash back cards until you have a good shot at getting approved. When you apply for a credit card, the creditor will pull a hard inquiry, which will impact your score.
A secured credit card works by placing a deposit (typically at least 0) that will serve as your credit limit. When you’re , always look for their annual fees and make sure they’re reporting to all three major credit bureaus.
Once you have the card, focus on making your payments on time and even consider making multiple payments throughout the week. Your goal should be for the creditor to convert your secured card into an unsecured card.
Focus On the Big Picture
Your credit score won’t put food on the table or a roof over your head. Too many people are so obsessed with their credit scores that they stop thinking about their overall financial health. If you’re able to keep your spending under control and become an expert in managing your own finances, a will follow.
Rob Ebrahimi is a member of the DailyWorth Connect program.
Video: GET AN 800 CREDIT SCORE IN 45 DAYS FOR 2018
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