3 Things That Can Quickly Fix Your Credit

Updated: Jul 17

June 22, 2022

 
Couple purchasing a home for the first time.

Having good credit is almost like having a million dollars! It opens so many doors and gives you amazing spending power.


It allows consumers to take a serious look at you and your money, motivating them to sell you the things you need.


It even saves you money by allowing consumers to offer you low interest rates.


Most people don’t have hundreds of thousands of dollars lying around, therefore, they need credit to make major purchases such as a car or home.


There are often 2 other types of people: first, people who have a love-hate relationship with their credit due to lack of knowledge and/or negligence, and second, those who feel that not using credit and thus having no credit history makes them better than those with bad credit.


In this article, you will learn 3 ways to quickly fix your credit by,

1) Getting a secured credit card,

2) Paying your current bills on time, and

3) Disputing inaccurate information on my credit report.


Get a Secured Credit Card

Credit Card

One of the easiest ways to build your credit, whether you have bad credit or no credit, is to get a secured credit card. Now you may be thinking, “Who's going to give me a credit card, I have bad credit or no credit.”


That’s the thing about a secured credit card they are risky. According to this great article I read in The Balance, author Latoya Irby mentions that “ secured credit cards require a deposit that serves as collateral for purchases you make using the card. If you default on your payments, the card issuer keeps your deposit.”


You will have to start the habit of paying your bills on time. If you have not made up your mind to build good spending habits this may not be the route for you yet. However, if you decide to take this route there are some pros to getting a secured credit card.


Pros

  • It is really easy to get approved

  • It is reported to the credit bureaus

  • Your deposit is included in the balance and you only lose it if you default

  • You can upgrade eventually with good behavior


Now, let’s talk about your chances of getting approved. You are more likely to be approved for this type of credit card because you have to give something to get something like I mentioned before. That something is in the tone of about $50 to $250.


But beware, you shouldn’t pay more than $50 dollars for a secured credit card. The research gathered for this article led to a great article about the best types of secured credit cards around right now. According to Virginia C. McGuire, an author for NerdWallet, there are secured cards that offer rewards through cash back on purchases to cards that don’t even have to check your credit before approval.


If you decide to go this route, remember you can’t go on a crazy spending spree. You have to be responsible with your spending and pay your bill on time. If not, you could lose your deposit.


If you are afraid to tempt yourself with this type of commitment, the next alternative to getting a credit card without getting a credit card is to ask a trusted friend or family member to make you an authorized user on their credit card.


If you have never heard of this like most people I know, Alexandria White an author for CNBC, explained it in the best way I have heard in a long time. She writes that you're basically piggy backing off of someone else's good credit until you get your own good credit. But for this to work for you, You have to choose someone that has good bill paying habits. Make sure that this person has a credit score of at least (670-799) , which is good credit, or excellent credit which is (800-850).


As a matter of fact, I learned the hard way that not paying your bills on time has a tremendously negative affect on your credit score and credit history.


Speaking of responsible bill paying, this is another great way to build your credit.


Pay Your Bills On Time and Report them to Credit Bureaus

Let’s say you now have a credit card, but feel you could be doing more to help build your credit, go with that thought, because you should and you could.


You can decide today and moving forward, to paying your current bills on-time. Paying your car note, personal loan, and credit card bills on time impact your credit score and credit history in an enormous way.


According to My Fico, which is one of the best additions you can make to your personal finance community, payment history makes up 35% of your score and is a major factor in the payment history calculation of your credit report.


So you see the urgency!


That is a big chunk of your credit history. You may think just paying them is enough, and that you work so hard to do that. But not paying on time is hurting your credit as if you are not pay them at all.


PAY THEM ON-TIME!


Another awesome thing you can do is report your rent and some utility bills to the credit bureaus (Experian, Equifax, TransUnion) to get yourself a boost to your score, if you have a habit of paying these bills on-time. You would have to self report these bills to the credit bureaus yourself using their individual app or website, but the effort will help.


I personally used Experian Boost for my utility and cell phone bills and I used Rent Reporters to report my rent payments. Rent Reporters charge a small fee but I didn't need to use them for very long and felt it was worth the investment to reach my financial goal.


The last thing you can do to build your credit costs you nothing and doesn’t involve asking a favor of someone else.


Dispute Errors On Your Credit Report

A guy happily watching his credit improve.

The third thing you can do will change your score within a month and cost you absolutely nothing.


Get your credit report and dispute any old and/or inaccurate information. You can do this the long way, by going to each of the 3 bureau’s websites and asking for a credit report, then filing an online dispute with each company or you can sign up to My Fico.


This site will allow you access to your credit score and report from all the credit bureaus. Then, you can electronically dispute each inaccurate item on a single platform.


I signed up with My Fico and although I paid a small fee, I felt it really helped me to keep up with my credit and handle things without feeling overwhelmed. I used this platform for about eight months until my credit was where I needed it to be to reach my goal.


I like Credit Karma as well, but it is limited because you only have access to 2 credit bureaus on their platform. I still use this platform to monitor my credit till this day. But when I needed to make improvements, I invested in my goal.


Keep in mind these important things when disputing your credit, if the account is older than 7 years it should fall off your credit report, "most negative items will fall off your credit report automatically after seven years from the date of your first missed payment, however, they do not erase off your credit history." according to The Balance.


The "fall off" will affect your credit score in a positive way, however, creditors can still take legal action against you to collect their money. This could affect your attempts to secure a loan for a large purchase, like a home.


But if you are trying to make a small purchase, like a car or get a better credit card it is a great quick fix. Hard inquiries fall off after 2 years. If anything on your credit doesn’t look right, dispute it.


The credit bureaus say it takes a month to change the information but from my personal experience in some cases it will take them about two weeks to update the information.


YOUR CREDIT SCORE WILL CHANGE IN ONE MONTH!


This is a lot to take in and remember this is just the beginning of your journey. Understanding your credit report and history is the key to success. Despite the challenges, building your credit is possible.


It takes a little patience on your part but it is worth it in the end. The three ways I shared with you helped me build my credit in less than 3 months.





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