Whether you have yet to build a credit history or you’ve made some financial mistakes, improving your credit score is possible.
If your score is low or nonexistent, you can incorporate some strategies to improve it. By getting started today, you could see an improvement in a mere 60 days.
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Why You Should Improve Your Credit
Having a good score between 670 to 739 or higher means you’ll be more likely to get approved for lines of credit, and the terms will be more favorable. For example, people with good credit qualify for lower annual percentage rates (APR) on loans, meaning they pay less money back to the creditor over the course of the loan.
Aside from loans and credit cards, it’s easier to get housing and you won’t have to worry if an employer runs a credit check before offering you a job. A solid credit score can also help you secure utilities, a cell phone, and more.
How Is Your Credit Score Calculated?
There are different scoring models used when calculating credit scores. The models generally consider the same factors but assign different weights to each one. FICO Scores are the most common of all the scoring methods, with 90 percent of the top lenders in the United States relying on these scores before extending credit.
Your FICO Score is calculated by analyzing your:
- Payment history – 35% of score
- The amount owed 30% of score
- Length of credit history – 15% of score
- Credit mix – 10% of score
- New credit 10% of score
How to Start Improving Your Credit
Now that you know what goes into a credit score, it’s time to look at what you can do to improve it.
Get Your Credit Report
If you want to improve your credit score in 60 days, begin by getting a copy of your credit report. Review the report and check for inaccuracies. If you find any mistakes, such as a debt you don’t owe, dispute it with the credit reporting agency. If the lender cannot prove the debt, the credit reporting agency will have to remove it from your report.
When you review the report, make a note of your small debts, as well. Pay off some of the small debts you may have overlooked, you might have an old medical bill or past due utility charge sitting on your credit report.
Pay Down Your Highest Debts
Large debts will hurt your score, so make a plan to pay them off. Focus on one debt at a time, starting with the highest and working your way down.
Also, consider the payment schedule. If your largest debt is due at an inconvenient time, you might have trouble making payments. Most lenders are willing to adjust the payment schedule to fit your needs, so don’t be afraid to ask.
Finally, put as much money toward the debt as possible each month while making the minimum monthly payments for the other debts. Doing this will allow you to pay off the debt faster. Then, when you pay off the first debt, move down the list to the next one. Continue the process until you are debt-free.
Ask to Be an Authorized User
If you’re trying to build a credit profile, you can benefit from becoming an authorized user on someone else’s account. As an authorized user, you’ll be a secondary account holder – but you do not need to use the account to get a credit boost.
Ask your partner or close relative if they would be willing to help you build your credit. This technique works best if the credit account has been open for a long time, has a low credit utilization rate, and perfect payment history.
Apply for Credit Builder Loan
You can give your score a nice boost by borrowing up to $1,000 with a Credit Builder Loan from MoneyLion. The loan and payments are reported to all three credit bureaus, and you can raise your score by as much as 60 points in 60 days. That means that in just two months, you could have more credit options, get better rates, and so much more thanks to your improved credit score.
Applying for a Credit Builder Loan is easy. First, sign up for a MoneyLion account. Then, become a MoneyLion Credit Builder Plus member and apply for a loan.
Instead of checking your credit to qualify, MoneyLion will scan your bank account to ensure it’s in good standing, has been open for at least 60 days, and has an acceptable transaction and balance history. Since credit score is not a factor in the approval, your odds of getting the funding are significantly increased.
If approved, MoneyLion will deposit some of the funds into your checking account, and the rest will go into a Credit Reserve Account. You’ll receive that money after you pay off the loan.
Make your monthly payments and watch your credit score grow with weekly credit updates included in your Credit Builder Plus membership.
How to Maintain Your Credit Score
Now that you know how to improve your credit in 60 days, it’s time to learn how to maintain it.
Below are some tips on how to maintain your credit score.
- Apply for credit only when needed – multiple applications or opening lines of credit and closing them quickly will hurt your score.
- Refrain from maxing out your credit cards.
- Keep your credit utilization at 30% or under.
- Keep accounts that are in good standing open, this adds positive credit history to your credit profile and steadily increases your score.
- Monitor your credit.
Take Action to Improve Your Credit Score Today
Improving your credit score is possible with MoneyLion, now it’s time to make it happen.
When you apply for a Credit Builder Loan, you gain access to funds today, create a savings plan, and you can increase your score by as much as 60 points in 60 days!