For those of you who think that having a bad credit score is the end of the world, think again! No matter how bad a credit score you have, you can always rebuild it with the perfect plan and the determination to do so.
With more than half of 2022 being over, time is not on your side. However, the task is not impossible and you can improve your credit score for the rest of 2022 if you are looking to secure a loan in California quickly. The FICO scores are the most widely used credit scores and fall between 350 to 850 wherein the former denotes high risk and the latter low risk.
Let us first analyze why credit scores are so important when securing a loan.
Why is Credit so Important?
Whether it is an auto loan, an application for a credit card, a new mortgage or a refinance for an old one; your credit score is the most essential part of any kind of loan application. Did you know that almost 40% of companies check their potential employee’s credit scores to gauge their ability to manage finance and also their trustworthiness?
● A good credit score means:
● Better loan terms
● Lower interest rates
● Increased loan acceptance probability
● Great buying power
Top 7 ways to Improve your Credit Score immediately
Bad credit can negatively impact the chances of getting a loan which is why you should start rebuilding your credit immediately and increase your score; especially if you wish to secure a loan this very year. These strategies will help raise your score gradually in a few weeks especially if you stay consistent with them and prevent any fallouts during the period.
Here are the top 7 ways to improve your credit score for a quick loan:
1. Pay all bills on Time
This is a critical step that helps improve credit scores but is often overlooked by most California residents. Late payments can result in creditors reporting you to the credit bureaus with the late payments remaining in your credit reports for seven years. Set a reminder, pay beforehand, or simply keep a check on bills regularly to help avoid late payments.
2. Avoid opening unnecessary new credit accounts
Your credit score does not drop considerably when you first apply for a credit card. Responsible credit behavior such as paying bills on time, and maintaining a good score throughout the year helps you recover from the drop rapidly. However, keep in mind to apply for credit only when you need to as the more the number of credit accounts, the lesser your score will be.
3. Pay off debts without delay
Paying off credit card dues immediately can prove to be great for improving your credit score as it helps lower the Credit Utilisation Ratio. The amount of credit that you currently are using is known as Utilisation and is an important factor in the world of credit scores.
A good credit utilization ratio would be one where you use less than 30% of the total credit given to you. For example, keep your balance below $300 if you have a credit card limit of $1000.
4. Leave unused credit card accounts open
If you are looking for an online loan in California and wish to maintain a high FICO score, then we recommend never closing an already opened credit card account. An unused credit card account is a form of available credit that would positively affect your credit score and also decrease the credit utilization ratio in your account.
5. Review errors and inaccuracies on your credit reports
Keep reviewing your credit reports and do not delay in reporting errors and inaccuracies if any. Check for factors that bring down your score and take care of them for a fast online loan against a good credit score.
As a customer, you have a right to dispute any inaccuracies in your credit reports. If you wish to dispute a mistake or point out outdated items in the report, you can do so with no fee. Federal law allows you to avail a free copy of your credit reports annually from every Credit Reporting Agency.
6. Take the help of a credit-builder loan
If you can prove that you have enough income to pay all your bills, getting a credit builder loan will not be difficult. If you can reimburse all the advances, it will denote that you are capable enough of working on both your savings and credit at the same time. This will help improve credit scores quickly and help secure a loan in California.
7. Be patient
Do not expect an improved credit score overnight! Though it is a time taking process, it can be achieved in a few weeks; especially if you follow all the tips mentioned above. Be patient and analyse all your financial choices, limit access to new credit openings and stay one step ahead of all due payments every single day. Once the results start showing, you will notice how your credit score improves rapidly.
How Long Does it Take to Improve Credit Scores?
The very fact of how damaged your credit is and how low the score is itself determines how long it would take for you to improve it. Major incidents such as foreclosure and bankruptcy reflect in your report for almost a decade. However, following the above tips will help to improve your credit score and increase your chances of a quick loan in as little as 30 days. This will help you get a better score for the rest of 2022.
Improving your credit score is a tedious and time-taking job but worth it in the end. To avoid a bad credit score in the very first place, you must always pay bills on time, avoid taking on new debts, and also pay down any outstanding amounts at the earliest.
