7 Ways to Increase Your Credit Score Fast

You need a higher credit score, and you need it now. What are the best ways to increase a credit score fast?

Jun 1, 2014 at 12:00PM

Building a credit score is a lot like getting physically fit: It's best accomplished over the course of years, not in weeks or days.

However, sometimes you don't have years to wait. If you want to buy a house and apply for a mortgage, for instance, you need to increase your credit score now, not in six months or a year.

The good news is that you can make a difference in your credit score in the very short term. Think of it as a crash diet for your credit score. It may not be a complete, long-term solution, but it can make a noticeable difference.

Let's get started.

1. Correct errors on your report
The first thing you should do is order your free credit report at AnnualCreditReport.com. (Watch out for "free" credit reports from other sources; some of them are not so free after all.)

It's common for credit reports to have errors on them. One error can do serious damage to your score. The higher your score, the more damage one negative report can do.

If you find an error on your credit report, contact the credit bureau in writing. Include copies of any documentation you have, such as receipts. Send your letter by certified mail, return receipt requested.

You should also contact the creditor or other information provider in writing and tell them that you dispute an item.

2. Pay down your credit cards
One of the most important factors in your credit score is your credit utilization ratio. This is the total amount of consumer debt you owe, divided by your available credit. You should be using no more than 50% of your available credit. Less is better, and zero is fabulous.

If you can pay off your credit cards with available cash without jeopardizing emergency funds or other necessities, do it. Otherwise, stop spending money, sell something, work extra hours, and do whatever else it takes to get your debt balances down.

To make your credit look especially shiny, stop using your credit cards temporarily. You don't know what day of the month your bank may report to the credit bureaus, so they may report a hefty balance even if you pay it off every month. Pay the cards off and leave them at a zero balance so that your available credit ratio will be at its best.

3. Increase your available credit
Another way to improve your credit utilization ratio is to increase the available credit side of the equation. This can be as simple as calling your credit card company and asking for a higher credit limit. If you've made your payments on time, they'll probably be glad to grant you more credit on the spot.

You can also apply for more credit cards to increase your available credit. However, this can cut both ways. Your score will get temporarily dinged a few points when you apply for new credit. If you have a lot of cards, you may also get dinged for too many cards. Apply for new cards only if you don't have too many (more than a few) already and if you cannot improve your credit utilization ratio any other way.

4. Use credit if necessary
You have to actually use credit cards and other sources of credit to build a credit report. If your credit history is mostly a big blank because you don't use credit, you need to start using it.

Do not go into consumer debt to improve your credit score. Carrying a balance is not necessary. In fact, because carrying consumer debt at high interest rates is so destructive to your long-term financial success, it will eventually harm your credit history and score.

A small purchase now and then on a credit card is all you need to build a payment history. Always pay it off on time.

5. Ask alternate sources to report
Perhaps you have no credit cards, auto loans, or other consumer debt. However, you've been faithfully paying your rent, utilities, and cell phone bill. You can still have a credit history.

Some creditors are not required to report your history of payments and account status to the credit bureaus. However, they may do so if you ask them to.

You may be asked to pay a fee to have the credit bureaus add verifiable accounts to your credit history.

6. Close unused accounts strategically
Your credit score may be lowered by having a dozen or so credit cards. If you open a department store card every time they offer you 15% off for doing so, you can wind up with a pile of plastic in no time. It's time to close some of them.

Choose the cards you want to close carefully. Save the cards you've had the longest, because length of credit history is important in calculating your score. You might also want to keep cards with sizable credit limits if you need to watch your credit utilization ratio. Get rid of all those extra cards with low credit limits.

Be sure to actually close the accounts by contacting the bank. Cutting up a card doesn't close an account.

7. Have a mortgage lender request a rapid rescore
Let's say you've applied for a mortgage and you're just a few points away from qualifying for a loan or getting one at a preferable rate. There's one more step you can take.

If you've taken steps to improve your credit history but they haven't made a difference yet, you can have your mortgage lender request a "rapid rescoring." You may need to provide proof to the mortgage company of the new information that should be considered, and some lenders require you to pay a fee. You'll get your new, improved score in about 72 hours.

If the new score helps you get into your new home or pay lower interest expense over the life of the loan, the fee you pay for rapid rescoring may be the best investment you've ever made.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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