A good credit score comes in handy when you are applying for credit. Not only that your score will increase your approval odds, but also, it will help you lock in a lower interest rate. If you have a bad credit score, it is important that you take action and I am going to show you how you can raise your credit score in 30 days.
Is it possible to raise your credit score in 30 days? The quick answer is Yes. You can boost your credit score in 30 days if you are serious. What you need is a functional plan and taking action.
Each person’s credit profile is different. For this reason, the technique you use to raise your credit score in 30 days can vary from one person to another.
No matter how bad your credit score is, you can still boost your credit score in no time. You just need to get started.
What is a credit score?
Your credit score is a numerical expression that summarizes your credit profile. Lenders use your credit score when estimating how risky it is to lend you money. The lower your credit score, the high the risk associated with lending you money.
For example, if you have a bad credit score, it is possible that you have some or more of the following items on your credit report.
- Late payments
- High utilization ratio
- Too many hard inquiries
- Foreclosure/bankruptcies
- You have a low credit age, etc.
Being a risky borrower means that you are more likely to default on your credit. That is why lenders heavily use your credit score in their lending decisions. If your credit profile is messed up, you will more likely be denied credit. Those who will approve you for credit will charge you a higher interest rate on the money you borrow.
On the other hand, when your credit score is high, it indicates that you are a responsible borrower. That is you:
- make all your payments on time,
- don’t have too much debt,
- don’t borrow excessively,
- are financially stable, and you
- don’t have a major financial setback such as foreclosure, bankruptcy, collection, etc. on your profile.
As a result, many lenders will approve you for their financial products and give you a competitive rate.
The credit score is calculated with information extracted from your credit report. The ranges of credit scores vary based on the scoring model.
In general, your credit score ranges from 300 to 850 with 300 being the lowest score you can have while 850 is the highest score you can have.
Credit score ranges
Although your credit score is between 300 and 850, this range is divided into smaller ranges based on the quality of your credit profile.
The following are ranges of credit scores.
- 300-579: Poor
- 580-669: Fair
- 670-739: Good
- 740-799: Very good
- 800-850: Excellent
If you want to raise your credit score in 30 days or any other time, you should focus on getting into a particular range instead of hitting a particular number. For example, if you have a fair credit score, you might want to move into the Good credit score range or a higher range. Or if you have a 700 credit score, you can try to get into the Very Good credit score range.
This is because people in the same range tend to have similar rates. A person with an 815 score will pretty much have to lock in the same interest rate as someone with 850. So, don’t beat yourself up because you don’t have a perfect score.
There are different scoring models. But most common models are the FICO Score and VantageScore models. Most lenders use your FICO score. You can check your credit score for free using free websites like Credit Karma. But, the best place to start is from your credit card issuer. Most card providers give you access to your FICO score or Vantage Score for free.
Each credit report and credit score is compiled by credit reporting bureaus. There are three major credit reporting companies in the USA which are Experian, TransUnion, and Equifax.
One thing to keep in mind moving forward is that people in the same ranges tend to get the same treatment when it comes to interest rates. That is a person with a 750 credit score will pretty much qualify for the same interest rate as someone with a 780 score.
How to Raise Your Credit Score in 30 Days?
In order to raise your credit score in 30 days, you will need an aggressive strategy. There are many ways you can boost your credit score. But, only a handful of these strategies can actually boost your score in 30 days.
What you are going to learn in this article are strategies designed specifically to give you a direct effect on your credit score. Why 30 days? This is because your credit score gets updated once every month. Your goal here is to complete a particular set of actions that will impact your score BEFORE it is updated for the next month.
The following are 4 tips you can use to raise your credit score in 30 days.
1. Check your credit score and credit report
Before you embark on a journey to raise your credit score in 30 days, you first need to know your current credit score. You also need to get a copy of your credit report. Why these two are important in boosting your credit score in 30 days?
- Your credit score: By knowing your credit score, you will know where you stand on the credit score chart. This will give you an idea of how aggressively you need to approach the matter.
- A copy of your credit report: Credit bureaus compile your credit report and credit score. So, your credit report is a detailed document that shows you where you stand and what is affecting your credit score. Your report will show you each and every item that is keeping your score lower.
You can get a free copy of your credit report from each credit reporting bureau once a year. If you want to get a free credit report, visit the following website: AnnualCreditReport.com or call 1-877-322-8228.
After getting a copy of your credit report, read it line-by-line and make sure that you understand what has been reported in it. Everything in your report should be correct and up to date. Reading your credit report is the first step in raising your credit score in 30 days.
It is like going to the hospital. Your doctor cannot prescribe you medication without knowing what you are suffering from. You can’t fix your credit score without knowing what is affecting it.
2. Clean your credit report
The first phase of boosting your credit score in 30 days is to clean your credit report fast. Once the report is clean, you will need to move to the next phase.
In summary, every piece of information in your report should be correct. If any of the following information and many more are on your report, you should find a way to have them corrected, removed, paid, or forgiven (when applicable).
- Late payments
- Hard inquiries
- Collections
- Active loans
- Bankruptcies/foreclosures, etc
- Other negative items
- Inaccuracies
- Fraudulent activities
- Errors
- Medical bills
- etc.
Your job right now is to remove as much of this information as possible (when applicable). For example, if there is a hard inquiry that has been on your account for more than 24 months, you should dispute this inquiry. This is because an inquiry should automatically fall off your credit report after 2 years.
Take the following actions in cleaning your credit report.
- Dispute any errors and inaccuracies in your report. A debt that was mistakenly reported on your credit score will automatically reduce your score. So, get it taken care of.
- If you have collections, pay them off in full if you can. Although the collection will remain on your account for quite some time, some credit bureaus apply less weight to paid collections than active ones. Less weight will result in higher points on your score.
- You can also submit a GoodWill letter to your lender to remove a late payment and promise to pay all the remaining balance in full. Your lender is not obligated to comply with your request but it does not hurt to ask. Deleted late payments will have a direct increase in your credit score.
Your job in cleaning up your credit report is to correct all errors and inaccuracies, and have as many negative items removed as possible. You can get a tremendous boost in your credit score from just cleaning your report.
Once your credit report is clean, you will move to the next phase of raising your credit score in 30 days.
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3. Reduce your credit Utilization
The next phase to raise your credit score in 30 days is to reduce your credit utilization. Credit utilization affects your credit score by 30% and it is the second highest factor on your credit score.
Each credit card you have comes with its own credit limit. Credit utilization for that card represents how much you have spent compared to the available credit. For example, if your card has a credit limit of $1,000 and you spent $900, your credit usage will be 90%.
What does credit utilization mean?
Having a higher credit utilization shows that you are relying on debt to cover your expenses. Hence, making you a risky borrower. That is why you must reduce your credit utilization as must as possible if you want to boost your credit score in 30 days.
If you have a bad credit score, it is more likely that you have a higher credit utilization. So, by reducing your credit usage, your credit score will automatically go higher for the following month. This is because your credit score is updated every month. So, if you pay off most of your debts and lower your balance; the balance that will be reported to credit bureaus for the next payment period will be lower. This will result in an increased credit score.
Most lenders suggest that you keep your credit limit under 30%. If you want to boost your credit score in 30 days, you will need to do better than this. It is always a good idea to bring your utilization to under 10%. This will give you a much higher boost on your credit score.
How to reduce your credit utilization?
There are two techniques you can use to reduce your credit utilization.
- Pay off your balances: If you have balances on your credit cards, make extra payments for the month and bring your credit usage under 10%.
- Increase your credit limit: By increasing your credit limit, you will automatically reduce your credit utilization. The following are tips you can use to increase your credit limit:
- Request for credit limit increase: If your lender has not increased your credit limit automatically, you can request a higher credit limit. You can easily complete this process inside your account or by calling your card provider.
- Get a new credit card with a higher limit: If you cannot get higher limits on your current cards, apply for another credit card with a higher limit.
- Become an authorized user: This will not make your actual credit limit go higher but it will give you access to someone’s credit card and your activities on their accounts will boost your score.
Keep in mind that applying for a credit limit increase or for a new credit card will result in a hard inquiry. Each hard inquiry you get on your credit report will knock off about 6 points from your score. The effect of hard inquiries on your score will fade over time.
A hard inquiry does not affect your score after 12 months. But each hard inquiry stays on your report for 2 years. As long as you continue to use your credits responsibly, your score should recover from hard inquiries in a few months.
Related: How long do hard inquiries stay on a credit report?
4. Add your rent and utility payments to your credit report
Another trick you can use that works all the time is to have all business dealings reported to credit bureaus.
Your rent payment, utility payments, phone bills, etc. can be reported to credit bureaus. I am assuming that you pay them on time. Otherwise, late payments on these accounts can lower your credit score more once reported. Your game here is to remove as many negative items as possible from your credit report and replace them with good ones. That is how you play and win the game.
If you follow this strategy, you should see your score improve by a great value within the next 30 days.
What to avoid when you are trying to raise your credit score in 30 days?
In order to successfully execute this plan, you must avoid any activities that will hinder your progress. You cannot improve your credit score in 30 days when you delete one negative item and replace it with another.
That is why you should be careful about how you use your accounts.
The following are things you must avoid when you are raising your credit score in 30 days.
- Avoid late payments: Payment history affects your credit score by 35% and it is the highest factor that affects your credit score. Late payment will stay on your credit report for 7 years. If you are trying to boost your credit score in 30 days, make sure that you are making all your payments before the due date for each active account.
- Do not close a credit account: You should never close an account even if you do not use your credit card. This is because by closing an account, you automatically lower your credit age which affects your credit score by 15%. Credit age is the average length of time your accounts have been opened. Your credit score improves as your credit age goes higher. Your score will go lower when you close an account. You could also end up creating an imbalance in your credit mix which is another factor that affects your credit score.
- Avoid excessive borrowing: Earlier, I mentioned that you can increase your credit limit by opening a new credit account or requesting for credit limit increase on your existing accounts. If you choose this route, make sure that you qualify for those cards or an extra line of credit. More importantly, do not do it excessively. Otherwise, you could be denied but the inquiries will be there whether you get accepted or denied. Remember, you are trying to give up 6 points off your credit score in exchange for a lower credit utilization (a higher credit limit will lower your utilization).
Final words
Can you raise your credit score in 30 days? Yes, you can boost your score in as little as 30 days. There are 3 important things you can do to improve your credit score in 30 days.
- Clean up your credit report: Get errors and inaccuracies removed or corrected from your credit report. Then, have all possible negative items removed or paid off from your report (when applicable).
- Reduce your credit utilization to under 10%
- Finally, have your rent, utility payments, etc. submitted to credit reporting bureaus.
While executing this plan, make sure that you avoid activities that will reduce your score and hinder your progress such as late payments, closing accounts, etc.
This plan should help you raise your credit score in 30 days.
