10 steps to improve your credit score in 6 months:
Are you searching for, ‘How to fix my credit score in 6 months?’ We have come up with some really valuable tips to help you. Read more further down.
Wherever you are in North America, a credit score is a crucial point and will remain a crucial point when your mortgage is approved or if it will be a background check for a job. A credit score helps an institution identify how reliable a person is when it is financial. There are several factors that affect your credit score. But before that, you should know where a credit check is done to make it easier for you to understand how these steps will help you improve it.
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How To Fix My Credit Score in 6 Months – Start With Your Credit Score
A credit check is performed when you apply for a new credit card, request a mortgage or receive funds for your car. It is also done when you sign a contract with a mobile phone operator or even if you move from one operator to another. Sometimes, companies want a credit check when employed. A credit score shows your image in the market. The result of your score will be the amount of mortgage you are allowed and, if so, the interest rate. Increasing your credit score is not large, you just need to follow some basic steps and I can guarantee that your score will definitely improve within 6 months.
1. Check your credit score:
Equifax and Trans Union are consumer credit reporting companies for which you can obtain your credit report and qualify for free or at nominal rates. The reason to verify your report is basically if there is an error in the report. If there is an error in your report, you must inform the credit bureau to fix it. Remember that you can damage a score when potential lenders have a “hard pull”, but at the same time, there is no penalty when you verify your own credit score. Equifax will keep a record of any consultation (soft or hard) for a maximum of 3 years from the date it was made and 6 years in the case of Trans Union. On the other hand, bankruptcy will remain for 14 years.
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2. Credit card application:
The easiest way to get a credit card is from your bank with which you are doing business. If this is not the case or choose a secured credit card. Never choose store credit cards because interest rates can be high. If you are in Canada, I recommend Tangerine Master Card. There is no credit card fee with 2% cash back up to 3 different categories and 4% refund during the first 3 months.
3. Use a credit card instead of cash:
Always use a credit card where it can be used, as there are many benefits. First of all, you are making your credit history, as well as most of the credit cards that grant rewards such as Cash Back, Airplane Points, Adventure Points or Air Miles and may be different from the region. Secondly, the transaction through a credit card is more secure, as is the case with fraud or you can call your credit card company to stop payment or recover the money. Otherwise, you can find an extended warranty option, health insurance and travel outside your province, and many more according to your credit card.
4. Pay bills on time:
A lost bill payment can consider your credit report for the next 6 years. So always pay with your credit card or premature bill payments. If your due date is the 13th of each month, you should always pay 3-4 days before the due date. The best way to do this is to previously authorize your credit card for your billing accounts and arrange a recurring payment for your credit card in your bank account. This way you never lose the payment. In addition, if you cannot pay in full each month, it is recommended that a minimum payment be made at least monthly instead of as requested. Your score will also affect the bills that are sent to a collection agency.
5. You always spend less than your limit:
Of all the factors, the credit score depends on the total amount you owe at the end. Therefore, you should not spend more than 60% of your credit limit. Let’s say your credit limit is $1000 of what you should spend no more than $600 and if you spend more than $600 constantly over 60%, do not contact your credit card company to increase the credit limit. As the increase in the credit limit will require a credit check.
6. Only pay a minimum payment:
Obviously, a credit card can help us in our difficult times and, sometimes, we have to adjust it by making a minimum payment, but it is not recommended for each month. If you do not make a minimum payment or you should not do it for more than 2-3 months in a row. Always try to pay the full balance.
7. Credit accounts maintain an active age:
The oldest credit account with which you have the greatest financial reliability is the one that you give to the lender. So think before closing the old credit card account, until and if there is no annual fee. When you close your credit account, your general line of credit reduces and increases your general use. However, this may not affect your credit score, but your average credit age account would also be reduced.
8. Do not leave credit cards unused:
If you have several credit cards, do not try to use them all. You can share your use for prizes to get more benefits. By spreading its use, its usage rate will be reduced and you can keep its use below 60% in the credit account. An unused credit card may result in a lower credit rating. If you really do not need unused credit cards or you must close them. Remember that your credit account will not affect your credit score, but you should verify your credit report after 3 months to confirm that a credit account is no longer active in your credit file.
9. Stricter payment due date:
Sometimes we may not pay on time and the cause may be there. I am not sure how many times you can do this, but you can ask your credit card company to extend or change the bill payment date and most companies or banks will do it for you. The best thing you can do is avoid losing your bill payment or adjust it according to your payment.
10. Do not request multiple credit accounts:
You should never request multiple credit accounts in a short period of time, you have no doubts about how the valuable offer goes. Each credit check of up to 14 points can be deducted or maybe more to optimize your total score. On the other hand, if you are applying for multiple credit or mortgage accounts showing that you are very desperate to obtain credit, you may be denied a credit institution. If you are buying a mortgage, always try to do so within 2 weeks after the period, since these consultations are treated as a single consultation.
Finally, I hope that these 10 tips help you with the question of how to fix my credit score in 6 months.