3 Tips to Raise Your Credit Score Fast | Real Money
My wife and I are planning to buy our first home now and we heard that when you buy a home (1st time buyers), your credit score goes up. We need to know if this is true and how long it would take to reflect in our scores because we need to be approved for a student loan in 4 months and we are already working with our credit for that to happen. If this is not true we would rather continue renting then buying a home now. Any advice?
A mortgage paid as agreed is the best thing anyone can have on their credit.
My wife and I have been in our home almost 4-years now, never been late with a payment and our scores have gone up over 100-points.
Very few people ever get to 800 or above without a mortgage paid as agreed.
CardRatings.com asked readers to tell us how they helped or hurt their credit scores. This story from reader Melinda Graham of York, Pa., shows how a little bill can cost you big money.
"In the fall of 2008, I got a flu shot at my doctor's office. A few weeks later, I got billed $5 for my co-pay on a 'blood draw' on that date. I procrastinated a bit on calling in to ask my doctor's office to fix what was probably just a miscoded procedure. Eventually I called and went through the usual ordeal of explaining the situation to person after person before finding the one who said they could take care of it.
"In the fall of 2009, I got a notice from a collection agency that my doctor's office had turned over a $5 unpaid bill for collection. I racked my brain for another bill that might have fallen through the cracks and couldn't come up with anything but the co-pay. So, there I was, looking at this collection notice and remembering the time spent on the phone the first time around, and I decided $5 wasn't worth the hassle. I mailed a check to the collection agency.
Do you need to repair your credit?
"Fast-forward a few months, when my fiancé and I decided to really get into discussing our finances in preparation for merging them after we got married. I told him about AnnualCreditReport.com, and how I like to review my credit report every few months. I hadn't checked it in a while, so we thought we should get our reports and pay for credit scores, too. And then I nearly fell off my chair when I saw that because the $5 medical bill had been reported by the collection agency, my score had dropped from 785 to 689! I was shocked: $5 = 96 points?! Boy, did I ever regret my decision to avoid the minor hassle of a phone call to straighten out the billing error.
"Subsequently, I did contact the doctor's billing office and got it all straightened out. They also notified the collection agency of the billing error and had that entry removed from my credit report with the credit bureaus. Unfortunately, my score only went back up to 764.
"No more collection agencies for me!"
Here's what every consumer should do to protect or improve a credit score:
Pay all bills on time, and keep your credit usage low. To improve your score, try to use only 1% to 10% of your available credit line.
Check credit reports regularly. Federal law allows you to get a free report once a year from each of the credit-reporting agencies -- Equifax, Experian and TransUnion. Log on to AnnualCreditReport.com to order or download yours.
Fix mistakes on your credit report. While lenders and credit card issuers report your activity to the credit bureaus, you are responsible for the accuracy of your credit report. Errors can be as simple as a wrong name or address or as complex as a line of credit that has been opened in your name, meaning you may be the victim of identity theft. Follow thesesix steps to fix errors on your credit reports.
Pay for your credit scores. If you anticipate applying for a loan such as a mortgage, you should get your credit scores a few months in advance so you can work on raising them. The higher your scores, the lower your interest rate will be. You may also want to subscribe to a credit-monitoring service, which will give you access to your scores on a regular basis. Knowing how much your scores go up or down based on your financial behavior may help you improve your money-management skills. Also, keeping an eye on your credit report and scores means you can jump on a problem before it gets out of hand and destroys your credit.
Finance Manager for over 8-years.
nitially obtaining a mortgage will probably lower your score some since you are taking on a huge amount of debt, however over time it will improve the score if you pay on time every month your score should see an improvement in about 12 months.
Don't worry about this - let me tell you why.
All places do NOT use the fico score
That gas company is using a fake score that is probably using a different scoring range
Ex: The fico score may be from 300 - 850
This gas company is probably using a fake scoring system with a range from 0-500 (or some other similar range)
So you see how you can't compare a "fake" score to a Fico score?
A 700 fico, may very well be the gas companies 300 score
New credit does tend to reduce scores for 6 months, but should not be more than 30 or so points. You didn't max out credit cards, did you?
You can do a quick check on your score to ease your mind
You can go to MyFico.com and pay a flat one-time fee of $20 to get your score
Or you can try Quizzle.com or Credit Karma.com
to get free estimates (not the fico score - but close enough).
Note, they will send you a couple of junk emails - just unsubscribe to them
Check your credit reports once a year for free at
Annual Credit Report.com
All 3 reports are free once a year. Make sure nothing strange is showing up on them
Not necessarily. You are assuming a lot of new debt so you scores would likely decrease initially. After you've made on-time payments for 12 months or so, that payment history will start to boost your scores.
