Although there’s really no quick fix when it comes to your credit score, understanding how to improve your credit score in 30 days is good knowledge to have.
The more active you are in improving your credit score and making sure your financial profile is in tip-top shape, the easier it will be for you to get a line of credit later on.
Staying on top of your credit report at all times is beneficial – and essential – but if you’re in a hurry and need to get credit fast, you’ll find these tips to be helpful.
Knowing How Often Your Credit Score Changes
The first step in knowing how to improve a credit score in 30 days or less is to understand how, exactly, a credit score works.
Your credit reports, which are calculated by Equifax, Experian, and TransUnion, are updated every month or so. Each of these credit bureaus generates new credit reports on a different timeline – some take up to 45 days to update your score.
Essentially, your credit score is calculated the moment it is requested by one of the three credit bureaus. Creditors (or lenders) report your payment history more or less on their own timeline and they might not report to all three credit bureaus at once.
Therefore, you might see a bit of a difference in your credit reports from each of these three lenders, especially if you check at various times of the month.
What is Considered “Good” Credit?
Credit scores come in all shapes, sizes – and numbers. In general, a “good” credit score is one that is over 720. A “bad” one is anything less than 620. You can get your score to what are considered “prime” levels over time, but you’ll need to stick with it.
Here’s another breakdown of credit scores:
- 720+ = Excellent
- 680-719 = Good
- 620-679 = Fair
- 580-619 = Poor
- 579 and lower = Terrible
What Sorts of Factors Affect Credit Scores?
There are several different variables that go into creating a credit score.
Your FICO score, the most commonly used type of credit score, is based on these five factors.
The most important element in any credit score is your payment history. Lenders want to see that you can pay your bills on time – this is key to a positive payment history. Even missing just one payment or being late by more than 30 days can drop your score quite a bit.
Amounts You Owe
How much money you owe on all of your credit accounts is another important variable. This focuses heavily on your credit utilization ratio. This is the percentage of your available credit on credit cards as compared to your credit limits. If you have higher credit card balances and lower limits, you’re going to have a lower credit score (and the reverse of this is true, too).
This makes up about 30% of your FICO score, while payment history comprises 35%.
Credit History Length
Credit history length comprises about 15% of your score and it analyzes how long you have been using your credit as well as the average age of your accounts. Opening multiple accounts in a brief window of time can decrease your average credit age, so you should only apply for new lines of credit when you absolutely need it.
This is a variable that is often neglected but it’s an important way that credit bureaus analyze your credit worthiness.
They like to see that you have a mixture of different types of credit. This shows a better ability to manage your debts.
For instance, if you have a credit card, student loans, and an auto loan, that’s better than just having credit card debt.
This makes up about 10% of your credit score.
New Lines of Credit
Last but not least is new credit. The final 10% of your report will be determined by new credit accounts and hard inquiries. Whenever a lender checks your credit, it will be considered a hard inquiry.
This can cause your credit score to drop briefly – the effects are usually minimal, but if you apply for many accounts in a short period of time, it can have a negative overall effect.
How to Improve Your Credit Score in 30 Days
Need to elevate your credit score quick, fast, and in a hurry? There’s always credit repair software out there that can help, but what if you want to do it yourself? Consider these tips.
Lower Your Credit Utilization Ratio
First, consider ways you can reduce your utilization ratio. If you have credit cards, requesting a credit limit increase can help, as can applying for a new credit card to transfer or pay down the debt. You also might consider paying your card off with a personal loan (which often has lower interest rates, anyway).
Get Late Payment Forgiveness
In a perfect world, you wouldn’t ever miss a payment or make a late payment. However, we all know that nobody is perfect.
However, since late payments comprise such a large portion of your credit score, getting on top of late payments when they do happen is important.
Call the customer service line at your credit card company and see if they can forgive our mistake. Often, if it’s just a one-time slip-up, they’ll be willing to skip reporting your misstep – but often, you can only do this once or twice before the credit card company catches on.
Don’t abuse this privilege!
Get a Balance Transfer Credit Card (or Peer-to-Peer Loan)
If credit card debt is what’s dragging your credit report down, you may want to get a balance transfer credit card or a peer-to-peer loan. Both of these tools can help you pay off your credit cards fast – and they often come with much lower interest rates.
Only apply for these if you have a solid shot at getting approved with the credit card issuer. Your credit score will take a dip when you apply, which can be dangerous if you’re looking to improve your credit score in a limited 30-day window.
Once you apply for a balance transfer credit card, remember to always pay more than the minimum. Don’t close the old credit card, either, as this could cause a drop in your credit score (even if there’s no remaining credit card debt on that account).
Contact the Credit Bureaus
If you suspect that there is inaccurate information on your credit report, contact the bureaus. You can get one free credit report each year from each of the three credit bureaus.
If you spot incorrect information, such as a name mix-up or incorrectly reported payments, you can file a dispute with the Consumer Financial Protection Bureau.
Always check your reports to make sure there aren’t any problems (or identify theft). This is one of the best ways to keep a consistently high credit score!
Do Not Pay Your Accounts in Collections
It’s not great if you have accounts that have gone to collections – but if you do, don’t pay them. Dispute them. It won’t help your credit score to have accounts in collections on your report that have a zero balance.
Instead, wait to pay collections accounts until you have a pay for delete letter. This is essentially an agreement that you will pay the debt if the company deletes the account from your report. Often, you can settle the balance for less than what you owe – but the main goal here is to avoid having the collections report affecting your credit score.
Try a Secured Credit Card
A secured credit card is one that will require a security deposit up front – essentially, it’s a downpayment on your reliability as a borrower. You’ll get this back if you upgrade or close the card. If your credit is in truly dismal shape, a secured card will let you rebuild your credit in a limited amount of time.
Don’t Close Credit Accounts
One of the most common mistakes that people make when they’re trying to build a positive credit history is to close their old, paid-off credit card and personal loan accounts.
The length of your credit history is a major factor in your credit score. Credit bureaus and lenders want to see that you have been a reliable borrower for many years.
Unless you have a very strong, compelling reason to close out your accounts, don’t do it – just leave them dormant. Otherwise, avoid it, because it won’t do much to improve your credit score.
Become an Authorized User
If you can, have someone add you as an authorized user on their credit card accounts. You don’t even have to get a card.
Just make sure the person who is adding you to their credit card accounts has a good credit score themselves (and a solid payment history). Otherwise, this technique could backfire!
Stick With It – Be Consistent to Maintain a Good Credit Score
As we mentioned earlier, there’s no way to improve your credit score overnight. To see real results, you’ve got to stick with it!
While you can always consider credit repair options, just be careful. Many lenders and other fly-by-night schemes advertise fast results that will let you improve your credit score by hundreds of points in just a few days. Unfortunately, these are little more than gimmicks – while some credit repair companies can be helpful, most can’t do anything about your credit score that you can’t do yourself.
Therefore, it’s better to work hard to develop strong, consistent credit habits – and use those habits over time to build your credit history.
Make “credit curation” your new hobby, and within time, you’ll be able to make a huge impact on your financial standing!