Want to take out a mortgage? Move into a new apartment? It could all depend on your credit score. Luckily, credit scores update about every 30 days. This gives you a 30-day window to bring up your score between updates. You may even raise it enough to secure a much lower interest rate for a loan or a new credit card with more benefits. Check out these top seven tips on how to improve credit score in 30 days.
Understand What Your Credit Score Reflects
When it comes to taking out a loan (or sometimes even renting an apartment), your credit score is your reputation and your resume. This three-digit number shows your bank or landlord your ability to pay back a loan. It accounts for and weighs factors like your payment history, your balances, your length of credit history, your new credit, and your types of credit. If you want to improve your credit score, you first need to understand the determining factors fully. Spend some time learning about credit so that you know what habits you can change to improve yours.
Negotiate Your Late Payments
Missed or late payments happen. Luckily, some creditors will “erase” the debt. Offer to pay your remaining balance or part of it in exchange for your creditor reporting your account as “paid as agreed.” If you are lucky, they will remove it entirely. Make your offer in writing and get a written agreement before you pay. Your creditors might turn you down, but you have nothing to lose by asking. If you do not get it removed, the late payment could negatively affect your credit score for up to seven years.
Dispute Errors on Your Credit Report
One in 20 people have large errors in their credit reports. Once a large error is removed, an individual’s credit scores will bump up by at least 25 points. Examples of these errors included things like mistakenly reported late payments or incorrect balances.
To know if this is your situation, you first need to get a free credit report from the three different credit-reporting companies. Then, look over, compare, and verify your credit history. See an error? Contact the credit-reporting agency as soon as possible to dispute errors. You will need to provide proof, so gather up things like payment records, court documents, and identification. Once the agency receives your claim, they have 30 days to evaluate it. If corrections are made, you will see them reflected in your score. This can all happen in as few as 30 days.
Reduce the Amount of Debt You Owe
Another tip on how to improve credit score in 30 days requires reducing your debt. Not only will this increase your available credit limits, it will also help lower your debt load. Make a plan to pay extra on credit card, home mortgage, or student loan debt. If you have large balances and can make some big payments fast, you can earn even more points.
Just paying down your credit card balances to less than 30% will make a huge difference. On average, someone with a 680 credit score leaves a revolving balance of about 40% to 50% at the end of a billing cycle. Someone with a 780 credit score’s balance is 15%-25% of their credit card limit. You can calculate your revolving balance ratio by dividing your unpaid balance by your credit limit. Aim to bring your balances below 30% and you will improve your score within 30 days. Here are some simple ways to lower your credit card debt.
Increase Your Credit Card Limits
You can also reduce your revolving balance (and thus improve your credit score) by raising your credit card limits. Be careful how you go about this. Call your credit card companies and negotiate an increased credit limit. However, you do not want them to run a hard inquiry into your credit. Hard inquiries show up on credit reports and actually lower your credit score. Instead, request a soft inquiry, which does not affect your score. If you already have decent credit and a solid payment history, you have a higher chance of success.
Do not take advantage of your raised limits by spending more money. Keep your spending habits the same and watch your credit score improve. Your revolving balance ratio will decrease and hopefully land you in the 15%-25% zone.
Take a Month Off of Primary Credit Card Use
Having a lower debt-to-income ratio will positively improve your credit score. Luckily, you can achieve this in just 30 days. Simply time your shopping well. After paying off a credit card, wait for an entire billing cycle before using it again. Typically, credit card companies will report your credit score right before your bill is due. This means your account balance (a debt) gets reported, even though you will be paying it off shortly. If you wait a full 30 days after paying a card off, your credit card company will report a balance of $0 to the credit bureaus. This low balance translates to a lower debt-to-income ratio and raises your score.
Use Your Inactive Cards
Although somewhat contradictory to the tip above, intentionally using inactive credit cards will also help. The average American carries around three credit cards in their wallet. Owning this many cards will not help you unless you are actively using them and paying off their balances. Your credit score accounts for the number of credit lines you have open, but these accounts must show activity to benefit you. Make some small charges to cards you have not used within the last 6 months. Quickly pay this money back, even before the bill’s due date.
Following any combination of the above tips on how to improve credit score in 30 days will raise your credit score and help you secure a better mortgage, car loan, or even a place to live. For the most part, these are not once-and-done methods. Make them part of your regular financial routine.
Compare the Best Student Loan Refinance Rates
Here are our top student loan refinance picks for 2019
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Student Debt Relief Loan Refinancing Advertiser Disclosure
College Ave: College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
College Ave Refi Education loans are not currently available to residents of Maine.
1 – The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2 – $5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees. Information advertised valid as of 04/26/2019. Variable interest rates may increase after consummation.
3 – This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
ELFI: Subject to credit approval. Terms and conditions apply. To qualify for refinancing or student loans consolidation through ELFI, you must have at least $15,000 in student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary institution.
LendKey: Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
CommonBond: Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate.
Splash Financial: Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval.com
Earnest: To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest’s fixed-rate loan rates range from 3.89% APR (with autopay) to 7.89% APR (with autopay). Variable rate loan rates range from 2.50% APR (with autopay) to 7.27% APR (with autopay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms of 10 years or less. For loan terms of 10 to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 23, 2019 and are subject to change based on market conditions and borrower eligibility.
Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/23/19. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.