Rebuilding Credit Fast
Should you find yourself on the tail end of a massive amount of debt, or even if you filed for bankruptcy, then your credit might not be in the best shape. The road to rebuilding credit fast is a long one, especially after bankruptcy, but it is not an impossible task. With some time and financial planning, you can rebuild your credit, perhaps to become even better than it was before. When looking to rebuild credit, there are a few things you should keep in mind.
Methods of Rebuilding Credit Fast
Making Constant Payments
One of the main factors in calculating your credit score is whether or not you’ve been making consistent payments on your credit accounts. These can range from student loan payments to credit cards. Making payments on these accounts will have a direct effect on your credit score. These types of payments are reported to the main three credit bureaus and will have an immediate and long-lasting impact on your credit score.
Making constant payments on your credit accounts can help to bring your credit score into good shape. However, should you begin to miss payments your credit score will start to suffer. The more payments you miss, the more damage you do to your credit. Rebuilding credit fast becomes harder if you miss these kinds of payments.
Paying Off Existing Credit Debt
In many instances (except after certain types of bankruptcy) paying off your debts will allow you to see the most immediate increase in your credit score. The less credit you utilize, the higher your credit score will be. Unlike other aspects that can affect your credit score, the amount of utilized credit you have can cause your score to fluctuate from month to month.
When rebuilding credit fast, using as little credit as possible is key to keeping your credit score high. It is also the best way to prevent you from creating more debt for yourself by forcing you to budget your expenses. Not using your credit will cause you to use your cash more cautiously. Overall, your handling of your finances, in addition to your credit score, should improve over time.
Keep Your Existing Credit Lines Open
There are some instances when getting rid of a credit card might seem like a good idea. However, there is a downside to closing out a credit account: it will negatively impact your credit score. One of the lesser known aspects of your credit usage is the age of your credit. The longer you keep your credit accounts open, the better it will be for your credit score. While rebuilding credit fast is about how you can immediately affect your credit score for the better, if you end up closing out any long standing credit line you’ll instantly shorten your credit age and take some damage to your credit score.
Keep Tabs On Your Credit Record
One of the most important aspects of rebuilding credit fast is to make sure your credit record stays pristine. While cleaning up your credit record will be important, it pays to make sure you’re up to date with the knowledge available to the three credit bureaus. If they have misinformation about your credit performance, your credit score will suffer. This can hurt if you only pay attention to your credit score and not your credit report.
There are many things to look after if you’re looking into rebuilding credit fast. Keeping your payments current and keeping your credit usage low will result in a noticeable change in your credit score. Other methods of keeping your credit score high require long term dedication, but if you’re able to do it then rebuilding credit fast won’t be too much of a problem for you.