Your credit score could be the difference between getting the loan, house, car, or job that you want.
The good news is that when you have no credit or bad credit, it is always possible to raise your score. The even better news is that you could raise it in as little as two months by implementing a few key strategies.
Keep reading to learn more about how to help improve your credit in 60 days and take control of your credit score today.
Why you want good credit
A good credit score may increase your chances of being approved for lines of credit and loans, like credit cards, auto loans, and mortgages, and can help get a job at a company that looks into new hires’ backgrounds, including credit scores. You may also qualify for lower annual percentage rates (APR) on loans, meaning you’d pay less interest to creditors over the life of a loan.
A healthy credit score can also help you secure utilities, a cell phone, and more.
How is your credit score calculated?
Many factors impact your credit score, although each lender may use different scoring models when making the calculation. One model is the FICO score.
Your FICO Score is calculated by analyzing the following details and weighing them according to the associated percentages.
- Payment history: 35%
- Amounts owed: 30%
- Length of credit history: 15%
- Credit mix: 10%
- New credit: 10%
Start improving your credit today
Now that you know what goes into a credit score, it’s time to look at what you can do to improve your score!
Get your credit report
Building credit quickly starts with knowing what your score currently is, which you can do by getting a copy of your credit report. Once you obtain your report, check for any inaccuracies, like reported debt you don’t actually owe or late payments that you know you made on time.
With MoneyLion’s Credit Builder Plus, you’ll have access to 24/7 credit monitoring, which can help prevent mistakes from slipping through the cracks and hurting your credit score.
Pay down your highest debts
A large amount of debt could negatively impact your score, so make a plan to pay it off and help get your number moving in the right direction. If you find that you are having trouble making your payments on a debt, consider calling your lender to discuss whether you can adjust your payment schedule. Many lenders are willing to work with you, so don’t be afraid to ask them.
A simple and easy way you could start reducing your debt and lowering your credit utilization rate — the ratio of your debt to credit limit — is to use the “snowball method.” Once you pay off a small debt, put the same amount of money you were putting toward the small debt to your next lowest debt source, plus the minimum payment. By the time you reach your higher debts, you should be able to make larger monthly payments to pay down those bigger debts quicker. Your debt payoffs will gain momentum, like a snowball rolling down a hill.
For example, say you have a car loan for $20,000 and the minimum payment is $350 per month. You also have a credit card with a balance of $3,000 that comes with a minimum payment of $60. Plus, you also have one more credit card with a balance of $500 and your minimum payment is $25.
Let’s say you decide that you’re going to put $250 per month toward your lowest debt of $500. Once that is paid off, start applying that $250 to the $60 minimum payment you were making on your card with the balance of $3,000 so that you’ll be paying $310 per month.
Once you pay off the $3,000 in full, add that $310 to the payment for your car loan. That means you’ll be able to put $660 toward the car loan each month! You’ll almost be doubling your monthly payment, which means you should pay it off that much sooner over time.
Start building credit today
Another way to help build credit fast is with a Credit Builder Plus loan from MoneyLion. As a Credit Builder Plus member, you can access up to $1,000 from MoneyLion, and both the debt and the payment history will be reported to all three credit bureaus — with no hard credit check1.
More than half our members raised their score by up to 27 points within 60 days.2. With an increase like that, you may be able to access more credit options, get better rates, and take advantage of many more benefits thanks to your improved credit score.
The best part is that building credit with Credit Builder Plus is easy and only requires you to follow a few simple steps. To start, sign up for a MoneyLion account and link to a bank account that has a recurring direct deposit. Then, become a MoneyLion Credit Builder Plus member, and from there, you’ll be able to apply for access to a portion of the money right away.
If approved, MoneyLion will deposit a portion of the funds into your linked checking or spending account, and the rest will go into a Credit Reserve Account. You’ll receive that money in 10 to 14 business days after you pay off the full amount. Plus, you’ll receive weekly credit updates as part of your Credit Builder Plus membership.
How to maintain a healthy credit score
Now that you know the best ways to help improve your credit in 60 days, it’s time to learn how to maintain it. Here are some tips on how you might be able to maintain your new, healthy credit score:
- Apply for credit only when needed. Applying for multiple opportunities, opening new lines of credit, or closing them quickly are all actions that may impact your score in a negative way. The hard credit checks that are required before you can open new lines of credit may also negatively impact your score.
- Refrain from maxing out your credit cards.
- Keep your credit utilization at 30% or less, with an ultimate goal of 10%.
- Keep accounts that are in good standing open. Doing so could positively impact your credit history and help steadily increase your score over time.
- Monitor your credit score to stay on top of mistakes that might appear on your report. Know the steps that you should take to keep your score healthy as well.
Take control of your credit today
How fast can you build credit? A Credit Builder Plus membership from MoneyLion can help you understand your finances and keep track of them.
The Credit Builder Plus loan could help make it possible for you to watch your score increase as you continue to make monthly on-time payments, monitor your credit 24/7, and access a portion of the credit-building funds right away. Take control of your credit today and create a better financial future with the help of MoneyLion.