9 Strategies to Improve Credit FAST

In today's financial landscape, a good credit score is essential. For clients with credit scores lower than desired, there are actionable strategies that can lead to significant improvements—potentially up to 100 points—within a short period. This guide (sourced from Nerdwallet) provides detailed steps to help you educate your clients on boosting their credit scores and estimates for how quickly and effectively they can achieve their goals.

1. Pay Credit Card Balances Strategically Impact: Highly Influential Time Commitment: Low to Medium Speed: Fast Credit utilization, the portion of credit limits used at any time, is crucial for credit scores. Aim to keep utilization on any single card below 30%, ideally in single digits. Pay down balances before the billing cycle ends or make multiple payments monthly to maintain low balances. Tips: - Track your credit utilization through credit score profiles. - Set calendar reminders or alerts for balance thresholds.

2. Ask for Higher Credit Limits Impact: Highly Influential Time Commitment: Low Speed: Fast Increasing credit limits lowers overall credit utilization, which can boost scores. Request higher limits if your income has increased or you have a longer credit history. Be cautious to avoid the temptation of higher spending. Tips: - Contact your credit card issuer for a limit increase. - Aim to avoid "hard" credit inquiries.

3. Become an Authorized User Impact: Potentially High Time Commitment: Low to Medium Speed: Fast Being added as an authorized user on a well-managed credit account can improve your credit. Ensure the account reports to all major credit bureaus for maximum benefit. Tips: - Discuss terms with the primary account holder. - Confirm reporting to all three credit bureaus (Equifax, Experian, TransUnion).

4. Pay Bills on Time Impact: Highly Influential Time Commitment: Low Speed: Variable Timely bill payments are critical. Late payments can damage credit for seven years. If you miss a payment, catch up immediately and negotiate with creditors to potentially stop reporting it. Tips: - Set up reminders and automatic payments. - Focus on resolving recent and major delinquencies first.

5. Become an Authorized User Impact: Varies, Potentially High Time Commitment: Medium to High Speed: Variable Errors on credit reports can significantly lower scores. Regularly review your credit reports and dispute any inaccuracies promptly. Tips: - Request free reports from AnnualCreditReport.com. - Track and follow up on disputes.

6. Deal with Collections Accounts Impact: Varies Time Commitment: Medium Speed: Moderately Quickly Resolving collections accounts can prevent legal actions and potentially improve credit scores. Paid collections are ignored by newer scoring models. Tips: - Verify the accuracy of listed collections. - Negotiate with collection agencies for reporting adjustments.

7. Use a Secured Credit Card Impact: Varies Time Commitment: Medium Speed: Several Months Secured credit cards, backed by cash deposits, are excellent for building or rebuilding credit. They help establish a history of on-time payments. Tips: - Choose cards that report to all three major credit bureaus. - Consider alternative credit cards without security deposits.

8. Get Credit for Rent and Utility Payments Impact: Varies Time Commitment: Medium Speed: Several Months Secured credit cards, backed by cash deposits, are excellent for building or rebuilding credit. They help establish a history of on-time payments. Tips: - Choose cards that report to all three major credit bureaus. - Consider alternative credit cards without security deposits.

9. Add to Your Credit Mix Impact: Varies Time Commitment: Medium Speed: Medium Diverse credit types, like loans and credit cards, can improve scores. Consider adding new types of credit accounts responsibly. Tips: - Evaluate the cost-benefit of new credit applications. - Ensure new accounts report activity to all three bureaus.

Changing your credit will impact your qualification and loan approvability. Consult with a mortgage professional to align with your goals. If you client doesn’t have the score they need to qualify in this market or needs expert advice on how to improve their credit profile, I have vetted experts who can assist with their situation. I am here for any credit questions and to empower them to their goal of homeownership! Original Source: https://www.nerdwallet.com/article/finance/raise-credit-score-fast