5 Ways to Jumpstart Your Credit Score in 2017

Building good credit can take awhile, but there are some steps you can take to jumpstart your credit score.

Improving your credit score is usually considered a lengthy project. Many factors that contribute to a good credit score — such as payment history and age of accounts — take time to establish. And if you have no credit history or a poor credit score, your best bet for credit improvement may be to establish a long-term plan for establishing good credit habits.

But if you’re thinking about applying for, say,  a mortgage in the new year or have another financing need on deck in early 2017, you may want to know how to quickly improve your credit score in 30 days or less. While no activity is guaranteed to improve your credit within a time frame that short, there are quick, simple actions you can take to try for fast results. Here are a few ways to jumpstart your credit score. 

1. Become an Authorized User

“One tried-and-true trick is to have someone with great credit add you as an authorized user to a card that they’ve had for a long time,” says Casey Fleming, author of The Loan Guide: How to Get the Best Possible Mortgage.

Using this method, you can piggyback off someone else’s good credit. Authorized users benefit from responsibly managed accounts because these accounts will be listed on the user’s credit report. But both you and the account holder need to be wary – if they aren’t as financially responsible as you think, or if they use their card irresponsibly, your plan can backfire and both credit scores could suffer. (Note: Authorized users can request delinquent accounts be removed from their credit reports; primary cardholders not-so-much, so be sure you’re not overcharging.) 

2. Request a Credit Limit Increase

You can ask your credit card providers to increase the limits on all the cards you own. If you have a history of timely payments with your credit card provider, there’s a good chance they will negotiate. By increasing your credit limits, you’ll be improving your credit utilization rate, which is the amount of debt you’re carrying versus your total credit limits — and is a major contributing factor to your credit score.

Note: This will only work if you don’t increase your spending. If your credit card issuer raises your limit by $1,000, and you immediately start racking up charges that eat up the difference, the increased limit won’t do much good. Experts recommend keeping your credit card usage at no more than 30%, with an ideal balance at 10%. (You can check your credit utilization rate by viewing two of your free credit scores on Credit.com.)

Keep in mind, too, a request for a credit limit increase could result in a hard inquiry on your credit report, which can ding your credit scores, so use this strategy carefully.

3. Pay Down Your Cards

To the point above, your credit utilization rate will also improve if you pay down your credit card balances. If you have some extra funds, consider making extra payments on your credit card rather than dropping $100 at Chili’s this weekend. Doing the former can make a real difference and is a decision you’re unlikely to regret.

“Paying down your credit card balances to under 30% of the limits” will net results, says Fleming.  

4. Check for Credit Report Errors 

There could be an error on your credit reports that are weighing your scores down — and, is so, its removal could quickly improve your standing. You can pull your credit reports for free each year at AnnualCreditReport.com. If something is amiss, be sure to dispute it with the credit reporting agency in question. Most credit report disputes must be resolved in 30 days; a few can take up to 45 days. You can learn more about disputing errors on your credit report here.

5. Ask About Rapid Rescoring

If you’re applying for a mortgage, one lesser-known trick is to ask your lender about a rapid rescore. Rapid rescoring services are usually provided by mortgage lenders when applicants are on the cusp of qualifying for a better interest rate.

Rapid rescoring can to help update credit reports or fix errors quickly. If you recently paid off a debt, or have proof that a negative item on your credit report is inaccurate, you can provide that documentation to the lender. The lender will then request a rapid rescore on your behalf, and either absorb the cost or pass it on to you. You’ll want to ask your lender ahead of time whether you should expect charges for the service. 

“If you are working with a mortgage company for a loan, they would handle this for you and it should not [drastically] mark up the costs,” says Tal Frank, president of PhysicianLoans, a niche mortgage company. “The rescore is the quickest way to see a change in your score once balances have been paid down and repairs have been made. It can be as quick as a one- or two-day turnaround time.”

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5 Weird Ways You Can Tank Your Credit

By now, there’s a good chance you know the big line items that can tank your credit score — bankruptcy, foreclosure, tax liens. But there are also some off-the-beaten-path ways you can damage your credit.

The exact effects will vary, depending on your full credit profile. (You can see where you stand by viewing your free credit report summary, updated each month, on Credit.com.) With that in mind, here are a few potentially unexpected credit-score killers.

1. Closing All Your Credit Cards

Your intentions may be good, particularly if you’ve racked up large amounts of credit card debt before, but closing all your credit card accounts at once could severely damage your credit utilization rate — the amount of debt you are carrying versus how much credit has been extended to you. It could also ultimately lower the age of your credit. You might want to consider keeping a card or two open, but on ice (figuratively or literally) to minimize collateral damage to your score.

2. A Sudden Spate of Bad Behavior

The saying “the bigger they are, the harder they fall” applies to most credit scoring models, so if your score in good shape, be wary of sudden bouts of bad payment behavior.

“If a consumer who has previously made their payment obligations on time month-in and month-out suddenly starts missing payments left and right, the impact on their score could be substantial,” Ethan Dornhelm, senior principal scientist at FICO, said in an email.

Similarly, running up a bunch of credit card balances simultaneously can severely hurt your credit. Your credit utilization comes into play again here, only this time, in lieu of lowering your total credit, you’d be raising your debt levels. For best credit scoring results, you want to keep the amount of debt you owe below at least 30% and ideally 10% of your total credit.

3. Opening Too Many Accounts at Once

You also want to slowly add new credit accounts over time, because opening up a slew of credit lines, particularly different types of debt, can damage your credit. You could incur lots of hard inquiries on your credit report, which may hurt your score, Bruce McClary, vice president of public relations and external affairs at the National Foundation for Credit Counseling, said. And you also risk giving lenders the impression you’re over-borrowing.

“There’s a lot of stuff that could start happening if you go down the road,” he said. For instance, misuse of those new accounts could weigh your credit down indefinitely.

4. Co-Signing a Loan

Co-signing on a loan will not hurt your credit, but you could incur big damage if you stop paying attention to the account and the person you co-signed for doesn’t make good on their obligations.

“You’re not the one using that account, but the same payment history is going to show up on your credit report,” McClary said. And, yes, any missed payments, high debt levels, or, worse, defaults, charge-offs and/or collections are going to impact your score.

To preclude problems, “be careful of who you’re putting in control of your financial future,” McClary said. And keep an eye on any accounts you may have co-signed.

5. Ignoring Divorce Debts

The courts may have found your ex-spouse liable for the debt they racked up on joint account, but your credit will still be affected if they decide not to make payments. (Ditto for any debts that are currently being contested in your divorce proceedings.)

“The creditors don’t care about the divorce decree, so if your credit is important to you, make payments if the ordered person is not and take them back to court for the money owed,” Thomas Nitzsche, media relations manager for ClearPoint Credit Counseling Solutions, said in an email.

Remember, no matter how the damage gets done, there’s are ways to fix your credit. You can generally improve your scores by paying down high credit card debts, contesting inaccuracies (you can go here to find out how to dispute errors on your credit reports) and building long-term smart spending habits, like making all of your loan payments on time. And, if your credit is in really rough shape, you may want some outside help. You can read more on how to find a reputable credit repair company here.

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