Updated: May 11
Need to make major changes in your finances for a major purchase?
I implemented some practical steps to put me on the right track.
I joined a debt consolidation company, a free credit monitoring site, and I even created a budget.
Still, I could be doing more. So I did. Here are 4 ways I increased my credit score by 60 points instantly.
Join credit monitoring service.
Got educated on ways to build my credit.
Became an Authorized User.
Disputed inaccurate information.
Join Credit Monitoring Service
I am not the type of person to give up when I really want something, so I decided to implement a plan that worked for me and helped me reach my goal.
I joined My Fico so I could see the credit score that all lenders use. This way, I could know exactly what was holding me back.
It was interesting to learn that each lender uses a different credit model to determine my score. I wanted a good interest rate, so a 610 wouldn't cut it.
I was a teacher, and a first-time home buyer, and was not happy with the things I had to do for some of these “Teacher Down Payment Assistance” programs.
I decided to go with an FHA loan.
This type of loan was the best fit for my situation. It meant that I would get the lowest interest rate and would only need 3.5% of the mortgage as my down payment.
Making this move meant I had to learn about my credit.
I had to learn what moves I needed to make to get the credit score I needed to have a mortgage I was comfortable with.
I decided to wait to build the 610 scores by educating myself on what I could do to improve my credit.
Education on Ways to Build Credit
Everyone is different, and everyone’s credit is different. When I saw my credit report, I was able to have a complete look at my bad behavior over the years.
I was determined to make some changes. I am an Educator, so educating myself just made sense for me.
I learned some things that allowed me to increase my credit score on my own. I increased it by 100 points after about a year and a half.
I learned that I needed to pay off the old debt I was planning to let fall off.
I made sure when I paid the debt. I also got a confirmation letter stating they would also delete the debt from my credit report.
This is important because they don’t just automatically do this!
I learned that,
Underwriters don’t like to see defaulted bills on your report, no matter how old.
So next, I learned I could ask someone I trust, and that trusts me to make me an authorized user on their credit.
Become an Authorized User
Another great way to boost your credit quickly is to become an authorized user of someone else's credit.
The catch is they have to be responsible with their credit and willing to let you do this.
You don't even have to have a physical card to do this. You need the history.
If friends and family see you improving your finances, they'll be more willing to help. Share your financial journey with them. Let them experience your progress with you.
Taking this step could improve your credit in about 2 months' time. That's impressive. Also, make sure whomever you choose has a credit score of at least 750 or higher.
Dispute inaccurate information
The last thing I did to build my credit was Dispute! Dispute! Dispute!
I saw things on my credit report that I had actually paid off years ago, and it wasn't deleted.
All credit bureaus have slightly different information about your credit history, so look at each report carefully.
There may be items on one report that aren't on another.
The credit bureaus are really good about updating these things if you can catch them. This action alone can raise your score tremendously.
Last, take care of your late payments. The only way to do that is to cancel them out with on-time payments.
This takes the longest amount of time.
Writing a letter to forgive the late payment may save you some time. But caution, it doesn't always work.
Major Take Away
You don't need a whole lot of money to take little steps to improve your credit.
Just starting somewhere, anywhere, can lead to credit boosts and improvement. So try these ideas today, and you'd be surprised where you end up in a few months.