Ways to speedily improve your credit health
As you probably already know, there is no quick-fix solution for increasing your credit score overnight. Just like treating a sugar problem takes months of medication, a strict diet and exercise plan, improving your score takes the same amount of discipline and consistency.
Having said that, there are a few things that you can do right away that will result in a noticeable improvement in your score.
1. For a start, get a copy of your Credit Report so you can identify the issues that are bringing down your score. (CreditMantri.com can provide you with a free credit score and also guide you on how to navigate the problem areas in your credit health.)
2. Find out if there are any administrative/reporting errors in your report that are pulling down your score for no fault of yours. File a dispute with the credit bureau immediately.
3. Resolve to make all your payments in time and in full. This is the best way to quickly improve your score. When you have a consistent record of making timely payments, you are viewed as being financially responsible and your score will rise. Conversely, the more you delay your payments (credit card bills, EMI, insurance premiums), the more your score drops.
4. Starting from today, spend less than 30% of the credit limit on each of your credit cards. It might be difficult to cut down on purchases and change your spending pattern, but having a low utilisation rate is a good way of improving your score quickly. You need to exercise the same self-discipline as a diabetic who has to give up eating sweets.
5. Ask your lenders for a hike in your credit limit. However, make sure that your monthly spending does not increase. This way, your credit utilisation rate immediately drops, causing your credit score to improve quickly.