Do you have a very low credit score? Want to give your score a boost for new loans? If so, here we will explain how to increase your credit score by 200 pointsand what steps you need to take to achieve it in a reasonable period of time.
Keep in mind that this will not be achieved immediately, it will take more than a week or a month, so to speak. But doing things correctly, you could see the results after 3 or 6 months. You just have to know the steps to follow.
Keep reading: Best credit cards for credit score below 599
How to increase your credit score by 200 points
Here we explain step by step how to increase your credit score by 200 points.
1) Request free credit reports
Remember that you are entitled to a free copy of your credit report every year. You can receive a free copy of your report from each of the three major credit reporting agencies: Experian, Equifax, and TransUnion. It is also possible to do it on the official government website AnnualCreditReport.com. Another option is to pay a small fee at one of three credit bureau websites to find out your exact credit score.
After receiving copies of your credit report, verify that the information on them is correct. This includes the list of open and closed accounts, payment history, legal judgments and collections.
If there are any outstanding balances on your report, then focus on eliminating that debt first.
2) Fix errors on your credit reports
Sometimes you can pay off a loan or outstanding debt, and the creditor doesn’t report it to the credit bureaus. This means that you have to request the correction of your history to the corresponding credit bureau. To do this, you will have to provide documentation that shows that you paid that debt. Your case will be reviewed internally to determine the validity of your request. If it is found to be valid, then your credit report will be updated with the appropriate corrections.
Always request the correction of any error in your credit report, this will have a very positive effect on your credit score.
Keep reading: What credit score should you have?
3) Consolidate your debts
The worst thing you can have is several outstanding debts with high interest rates. If you can’t pay them all right away, then consider applying for a consolidation loan that pays all your creditors for you and unify everything in a single debt. In this way, you will owe money to a single creditor instead of several. The Consumer Financial Protection Bureau has excellent tips for debt consolidation if you are interested in this option.
Make sure you make your monthly payments on time and don’t get into debt that is beyond your reach.
4) Get a secured credit card
Secured credit cards are a powerful way for someone with bad credit to boost their score. When you apply for a secured credit card, you must put up your own money in order to use it. For example, if you want a credit limit of $1,000 on your secured credit card, then you must make a cash deposit of $1,000. This assures the lender that they will not lose any money when you make a payment.
As you spend money on the card, make monthly payments to cover the balance. These monthly payments will be reported to all three credit bureaus, which will have a positive effect on your credit report. After 3-6 months, you may be approved for a regular credit card if your credit score has gone up enough.
5) Avoid any new credit
What to do with all those credit offers you receive in the mail or see online? Ignore them for now. Requesting new lines of credit, excluding the secured credit cards that we have mentioned in the previous point, can have a negative effect on your score.
What’s more, some creditors will make a credit report request when you apply. This can also hurt your credit score.
Keep reading: How to raise credit score fast
6) Use a co-signer
If you’re in desperate need of a car or facing an unexpected emergency expense and want a loan fast, then you could be in trouble with a bad credit score.
In these cases, try to find a family member or close friend who might consider becoming a co-signer on your loan. The lender will approve the loan if someone with a better credit score signs it with you. The good news is that by making your payments on time, you will improve your own credit score.. But if you fall behind on your payments, both scores will be affected.
7) Sign up for credit monitoring
The final step to increase your credit score by 200 points is as simple as keep track of your score each month. You can sign up for a monthly credit monitoring service at a licensed credit reporting company. You can also sign up directly on credit bureau websites.
It is important to receive regular updates of the credit score, this will allow you to see its evolution and the effect of the measures you are taking. What’s more, You can also detect if you are a victim of identity theft. If you find in your report loans or movements that you did not request, you can take the necessary urgent measures so that the identity thief does not do more damage to your score.
How to Increase Your Credit Score by 200 Points: Conclusion
Nothing is guaranteed, but if you follow these steps carefully and don’t fall behind on payments to your creditors, your credit score will increase by 200 points faster than you think.