Tuesday, 12 November 2019

5 Steps To Get An 800 Credit Score In 45 Days

Credit Score

In this article, I'm going to share with you 5 different tactics that you can utilize to grow your credit score as fast as possible. The big issue with credit score is that they usually take a long time to build up, but in this article, I'm going to share with you a few different tactics that you could use to grow a lot faster.

If you need to boost it in the next 30 days, 60 days, 90 days, I think this article might help you out.


Let's Get Started

Let's start with the most important one that can boost your score very quickly, I'm talking 30 days, 45 days, maybe 60 days and you can boost your score very quickly, this is great for people who have no credit history or possibly bad credit history. Anything below 600 isn't necessarily too good for credit score.

Read: 7 Factors Affecting Your Credit Score To Dropped

It's okay if you have a bad credit score, you can build it up over time, and that's the key here.


1. Authorized User Strategy

One of the best ways to do this is by becoming an authorized user under somebody else's account. I'm going to leave a couple of links down below, some source from discover and credit karma, just to sort of giving you more information about this. Because there's a lot of misconceptions about becoming an authorized user and how you can piggyback off of somebody else's credit score, but it's totally possible if you do it right.

https://www.creditkarma.com/credit-cards/i/authorized-user-credit-card/

https://www.discover.com/credit-cards/resources/authorized-user-and-credit-scores/

Read: How to Check Your Credit Score For Free

You can become an authorized user under somebody else's account so this could be your parent, sister, brother, even your kid if they have a good credit score with a long credit history or a friend, and if they have good credit, I would say anywhere from 750 to 760 and above.

They can add you as an authorized user. What's going to happen is, you're going to get a credit card with your name on it, but it's under their account, so they're legally liable to pay off your bills in a sense, and you personally as the authorized user aren't liable for this. 


One of the biggest questions that people ask is, "if I was the person who is letting somebody become an authorized user under me, am I going to be affected by their poor credit history"? The truth is No. You're not going to be.

  • Let say your parents were adding you as an authorized user, your parent's credit is not going to be affected by you being on there as an authorized user. Just keep that in mind and share that with them if you're trying to convince somebody to add you to their credit card as an authorized user.

Co-signing

You want to be careful with co-signing, this is another method that people use. Co-signing can create some problems because what you're going to have to do eventually is close that account and that can hit your credit score a little. We can talk more about co-signing and the negatives of that in the future. It's not always bad, but I think becoming an authorized user could be a better bet for a lot of people.


Here's The Part Where You Really Have To Pay Attention

What can usually happen and what does typically happen is that you as the authorized user, you'll get reported to the major credit bureaus, "the people who score credit scores". You'll actually get reported separately from the person who added you as an authorized user. So all of a sudden, you basically piggyback off of the person who signed up for you.

If they have a credit score of 800, and you're an authorized user under them, there's a good chance assuming that they report you separately which typically does happen, your score will go up tremendously, I'm talking 50 points, maybe even a 100 points or more sometimes. There are stories of people jumping even 120 points, 130 points in literally just 30 days from this happening. 

Here's The Second Part Where You Really Have To Pay Attention

Because this isn't always the case.

After the subprime mortgage crisis of 2007. FICO changed the way that they score credit scores and how they look at them. And now, they actually way the authorized user piggybacking method a little bit less.

What can happen is that, just because your credit score shoots up. You sort of piggyback off of this person's credit score. Let's say your score goes from 580 to 690. Your score goes from bad to decent, shoots up to 690, and you apply for a new credit card or you apply for a mortgage or an auto loan.


What can happen with some bank's, they can look deeper into it and say wait a minute, you're just an authorized user, you never had a credit card where you actually pay off yourself, and they can look deeper into it and they can reject you for some of those loans.

It's not always the best method, but it's a great way to boost it initially and sometimes they do use old methods for pulling credit and they're not really looking too deep into it, they're just looking at the number, but like i said, ever since 2007, they've been getting a little bit smarter with that. But it's still a great way to boost it very quickly.


Open Up A Secured Line Of Credit Separately

Another method you could use while you're doing this authorized user piggyback method. You can also open up a secured line of credit separately to sort of help boost it a little bit more. 

That's just an important tip that a lot of people don't even know it really exists. If you have poor credit or you have no credit, definitely look into that one, it's definitely a tremendous way to boost your credit as fast as possible.


There are 4 other strategies that you should be aware of if you're trying to grow your credit score as fast as possible.


2. Dispute Mistakes In Credit Report

Another thing that a lot of people don't realize you can do, is by writing to the credit bureaus. I'm talking about a physical letter writing to the 3 major credit bureaus and disputing certain things on your own credit report.

Just to give you an example of this,

There was a man who got divorced and his wife was settled by the courts that she legally owed him a certain amount of money for certain payments that was under his name and she didn't pay him, so he couldn't pay off the loans, so he defaulted on the loan. Hopefully, you that there.

He defaulted on the loans and then he got screwed over, and his credit score tanked, well, he actually disputed this and he got it taken off by writing to the credit bureaus.

Sometimes there are some smaller things, like missed payments that you might have miss 3-years ago, you can actually write letters and dispute this, if I were you I would google this, there's all sort of PDFs and different outlines that you could use to fill in the blank type of things that you could use to send these letters to credit bureaus.

As soon as this happens, as soon as you get some of these old things that are dragging down your credit score, as soon as you get them off. All of a sudden, your credit score can shoot up very quickly. I'm talking about 30 to 60 days, it can shoot up very quickly.


3. Avoid Hard Pulls (Short Run)

This is really important, let say that 2 to 3 months from now you are thinking about getting a new car, and you want to get a $20,000 loan for your new car, let say it's 45 or 60 days from now. You're going to want to plan this out a couple of months before, and not getting any hard poll on your credit.

What this can mean is
  • Don't try to open up more credit cards 60 days before trying to get a car loan. 
  • Don't try to get a car loan right before you try to get a home loan.

There's a couple example there of how they could negatively affect your credit. Because every time somebody is doing a poll on your credit, every time somebody is checking your credit in a hard poll, not a soft poll, there's a difference there.

With a hard pull on your credit, it's actually going to decreases your credit score, sometimes 10, 15, 20 points, or more, for a hard pull on your credit, so in the short run, keep that in mind, try to avoid those hard pulls.

In the long run it doesn't really matter so much, if you're thinking about getting a house next year, it doesn't really matter if you open up a credit card now, it might dip your score by 10 or 20 points but not too much, so I wouldn't worry about it in long run.


4 Low Utilization Rate

I'm talking about anywhere from 1% to 10%. Once you get off higher than 10%, that's when you're going to start to get into the territory where these credit card companies are going to find you a little bit riskier. And your credit score is going to decrease ever so slightly.

I try to keep my credit utilization at 3 4 5 percent. What this means is that, if you have a credit limit of $10,000, you're probably going to want to spend maybe $500 or less per month out of your $10,000 limit. Just to keep that utilization low.

Once you get up to 10% to 40% or more, that's when you're going to see your credit score starting to slip a little bit. So keep it very low. This makes up a very large portion of your score, just keep that in mind.


5. Never Miss A Payment Every Month

Sometimes we'll see people who will rack up $3,000 in credit card bills for a particular month, and then they'll say I have $3,000, I can't pay it off, so they'll just forget about it and just say you know what, I'll pay it off next month. And they don't pay the minimum payment.

As soon as you don't pay the minimum payment, it counts as a default and your credit score is going to get hit really hard for not paying off that minimum payment.

If you're going to carry a balance but I wouldn't recommend doing, because you're paying 20% to 25% interest sometimes on those balances on your credit, well, if you're going to do that at least pay off the minimum payment every month. It's so incredibly important to do that. It's a foolish mistake not to, and it's going to hurt you for quite literally years to come if you just miss that one payment.

What I do is I set up auto payment directly from my bank to my credit cards, so that I will never ever forget about it and that saves me a lot of worry instead of trying to time it perfectly and paying off your credit card right before it's due.


Conclusion

I think the biggest problem people have, they want to increase their credit scores like next week or 2 weeks and it's not that easy to do that. I think the first 2 methods that I share with you are very important and those are probably the best ways to increase it in the short run, but in reality, it's going to take a long time to build credit.



Those are 5 different tactics that you could utilize to increase your credit score as fas as possible. Thanks for reading our article.

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