Having a bad credit score can significantly complicate your financial situation. It’s astounding to see how a bad credit rating can affect various aspects of life, including purchasing a home, settling debts, and even job hunting. Fortunately, with the appropriate steps, you can boost your credit speedily. Here are three steps to improve your credit score within the year.
1. CHOOSE THE MOST SUITABLE SECURED CREDIT CARD
One might wonder why getting another credit card would help, especially when misuse of credit cards can cause financial turmoil. When your credit is poor, a secured credit card can be the quickest route to restoration. Generally, secured credit cards necessitate a security deposit, charge an annual fee, and enforce higher APRs. The objective here is to select a secured credit card that offers the best rates and is linked to other reputable cards. Most of these companies want you to improve your credit score swiftly so you can qualify for a higher limit card and pay them more. Use this to your advantage by sticking to your secured card until your score improves. Capital One and Wells Fargo offer good options. Ensure to use your card regularly, regulating your expenditures to roughly $200-$400 per month. Making full payments every month helps avoid interest charges and establishes a good rapport with the credit card company.
2. OBTAIN A COMPREHENSIVE CREDIT SCORE REPORT
The importance of this step can’t be overstated. My husband’s own experience is a case in point. Despite not having done anything to damage his credit score, he had difficulties getting credit approvals. An exhaustive background check, triggered by his job, revealed that due to a careless error, his father’s bankruptcies were linked to him. You see, he shares the same initials with his father, though not the same name, birth date, or even the social security number. This sort of error is surprisingly common and could possibly hamper your credit score too.
3. PRIORITIZE TAX DEBTS
If you have outstanding tax debt with the IRS that has resulted in a lien, it should be your prime concern. Once you have settled the debt or arranged a payment plan with the IRS, you can request to have the lien removed from your credit score. Doing so can significantly boost your score.
