3 Things You Can do to Improve Your Credit Score in 30 Days
Think of your finances as a lifelong race. Sometimes we feel like we’re running a relay, jumping over hurdles, or running long distances. Improving your credit score can even feel like a marathon–26 long, painful, arduous miles. Maybe it’s time to think of it as a sprint, though. With a few do-it-yourself tasks, it’s possible to improve your credit score in just 30 days.
1) Get a free credit report.
(Yes, it really is free.)
Warm up for the main event by checking your credit report. This report allows you to gather information about your credit status and know exactly where you stand and where to begin your sprint. Checking your credit by obtaining your credit report does NOT hurt your credit. In a sense, gathering this information is like you’re stretching your financial legs and lining up at the starting blocks.
You are entitled to receive a free copy of your credit report once a year from www.annualcreditreport.com. Your report includes data from the three leading credit reporting agencies — Experian, Equifax, and TransUnion. Checking your credit report will alert you to any major errors that can have negative consequences on your credit score. It will show you exactly where your credit stands, as well as financial habits that need work–both important pieces of information when starting your race to better credit.
2) Get down to the details, and protect your rep!
Now that you’ve got your background information, it’s time to start running. The first leg of your sprint requires some serious energy. Look through your credit report and make a list of all the items worth disputing. This includes all obvious errors and items that are old or questionable. Remember that you can only dispute errors on your report; if a negative item is accurate, it stays. Errors could include:
- Debts listed more than once
- Debts you have paid off that show as outstanding
- Erroneous personal information
- Closed accounts listed as open
- Signs of identity theft
Review this information carefully and thoroughly. It’s been reported that a terrifyingly high percentage of credit reports include errors, so it really is vital to check and double-check your reports.
Once you’ve found errors, write letters (yes, letters) to the credit reporting agencies explaining why the item is wrong and provide copies of supporting documentation. The agency that provided your credit report is required by the Fair Credit Reporting Act to investigate and fix any errors on your report, so contact the specific credit reporting company that provided your credit report:
It’s not enough to simply report false information; you have to explain why the information is false. You have to make your case. There are several examples of dispute letters online and from credit repair companies if you need help. Once you submit your dispute, the credit reporting agency and the financial institution reporting the item must investigate the dispute within 30 days. If they can’t prove what’s on your credit report, the credit agencies must immediately remove the item from your report. You can even request that the company send a copy of your dispute to anyone who may have checked your credit report in the previous six months. You’re already on your way to a better credit score!
3) Pay off debt.
The last stretch of your 30-day sprint takes some endurance and planning. Tackle your remaining debt by paying off as much debt as you can. Your credit score is based in part on your debt-to-income ratio, so paying off debts improves this ratio and your score.
Look at your budget and determine how much you can commit each month to paying off your debts. Pay off the debt with the highest interest rates first, even if it’s not your largest debt, because you will save money on interest. As you pay off debts, you can increase your monthly contribution and soon become debt-free. For every bill you pay on time, every old debt you retire, every outstanding debt you settle, and every new account you keep current, your credit score will rise.
We All Need a Little Help
Sometimes, though, every athlete needs a coach to train him and push him farther than he thought possible. To continue with our running metaphor, your credit coach may come in the form of a credit repair company. A credit repair firm can train you to you stay financially healthy and focused, as well as aiding in the credit repair process. These firms continuously monitor your credit report, dispute questionable items, and help craft a budget to pay off debt and build up savings. A credit repair firm can also guard against identity theft by keeping an eye out for suspicious activity.
Not all credit repair companies offer such complete services, so shop around to find a firm that fits your needs. Watch out for the scams or high prices that are so prevalent in the industry. Check out our recommendations for top, trusted credit repair companies or look through our reviews to find a company you trust.
Keep Your Eye on the Prize
Checking your credit report, disputing items, and paying debts can improve your credit score in 30 days, but those are only the beginning to achieving a life of good credit and financial stability. Maintaining your credit score is a marathon that last decades. Now that you’ve sprinted to improve your credit score, this is a great time to set some new financial goals. What needs to change about your money habits to keep your credit in good shape or to keep improving? How can you consistently pay bills and stay out of debt? Are there some lifestyle habits that need to change? Stay on top of your finances, pay your bills on time, stick to a budget, and you will find your credit score consistently in a good place. Keeping a good credit score means working hard to finish the sprint and sticking with the marathon. It won’t always be easy and you may feel a little sore, but dedication to this race will earn you the gold medal of a stellar credit score. Start your race with the 30-day plan and see what you can accomplish.
Has a 30-day plan worked for you? We’d love to hear about it!