Maybe your credit score has taken a hit because of an overdue balance, high credit card balance, collections account, or maybe some other reason. You could find yourself wondering, “How to fix my credit score in 6 months?”
The good news is that there’s help out there – and you don’t need to hire a costly credit repair company. You can boost your credit score by following a few easy and inexpensive strategies. Take a look at our guide on how to improve your credit score in 6 months!
Table of Contents
Calculating Your Credit Score
There are numerous factors that influence your credit score. You’ll first need to identify what made you fall behind before you can focus on actually improving your score. Here are some of the most common reasons why your credit score is lacking.
- Missed payments
- Late payments
- Using over 30% of your credit limit
- No credit history
- Applying for multiple lines of credit in a short period of time
- Closing one of your credit accounts
- Declaring bankruptcy
Fixing Your Credit in 6 Months
Once you know what caused your credit score to drop, you can take the necessary steps to fix your credit score in 6 months. Follow these top tips to get started.
Step 1: Get Your Credit Report
First things first – get ahold of your credit report. On AnnualCreditReport.com, you are entitled to a free credit report from each of the main credit reporting agencies – Equifax, Experian, and TransUnion through April 2021.
If you notice any collection accounts or small debts – pay them off immediately. Next, check whether your credit report is correct and dispute any inaccuracies. Use a credit repair solution like Dovly to automatically dispute mistakes. Dovly has a track record of helping people improve their scores – with 92% of customers experiencing a 54-point increase in just 6 months!
Step 2: Create Your Credit Building Plan
Take a deep look into your credit report and identify areas where you can make improvements. More often than not, if you’re struggling with debt it’s probably time to sit down and create a budget. Creating and sticking to a budget can help you get out of debt faster and manage your money better. Making a budget is actually easier than you may think, just follow these steps here.
Step 3: Pay Down Your Highest Debts
The golden rule of getting out of debt is to focus on paying down your highest and most expensive obligations first.
Start by calling your creditors and asking them about adjusting payment schedules or dropping any late charges. You might even be able to negotiate a lower amount – as long as you’re being reasonable. If your creditors agree to any changes, make sure to get everything in writing.
In the meantime, focus your budget on paying above the minimum required amount each month. This will help you pay off your debt faster, boost your credit score, and save you money in the long-run. Another good idea to set up auto-payments. This way, you can focus on paying off your debt first before you buy anything else.
Step 4: Apply For a Credit Builder Loan
It can be hard to work your way out of debt if you’re caught in a cycle of high-interest rates. One strategy is to pay off high-interest debt with a low-cost, manageable loan. MoneyLion’s Credit Builder Loan is a viable option.
Step 5: Monitor Your Credit
Actively monitoring your credit helps keep you on track for improving your score. For instance, if an issue or mistake comes up, you can quickly resolve it. You’ll also be more motivated to stay on budget and pay down your debt once you see the progress you’re making. Make sure to check in weekly or opt into updates.
For example, if you have MoneyLion’s Credit Builder Plus membership, weekly credit score updates are included with your membership cost. This way, you’ll stay in the know when it comes to your credit score.
Step 6: Gain Buying Power
Following these steps over the course of 6 months should have a recognizably positive impact on your credit score. Not only will your score improve, but you’ll also have a better understanding of how to budget and how credit works. Plus, with your new higher score, you’ll qualify for more attractive rates on loans, credit cards, and other financing options.
Maintaining Your Credit Score
Once your score improves and you have access to better lending terms but, it’s still important to maintain many of the same money habits to keep your credit score up. You only want to take on additional debt if it makes sense for your budget. You never want to borrow more than you can repay.
Additionally, make sure to never max out your credit cards. You want to stay in the sweet spot credit utilization rate of 30% or lower. Continue to keep accounts with good credit history open and make sure to keep monitoring your credit score regularly.
How MoneyLion Can Help You Fix Your Credit Score in 6 Months
MoneyLion offers a host of tools to help you fix your credit score in 6 months. Most notably, MoneyLion’s Credit Builder Plus Membership is designed to help people build credit. In fact, the majority of members are able to raise their credit score by 60 points within just 60 days!
You can borrow up to $1,000 with MoneyLion’s Credit Builder Loan. MoneyLion will report your balance to all three major credit bureaus. As long as you make your payments on-time and consistently, your score will get a boost! Plus, you’ll have access to other financial tools like weekly credit updates.
Ready to build your credit score in 6 months or less? Download the MoneyLion app to get started today!