By Sun Jung • June 12, 2014
Maintaining a good credit score is like having an offspring – they are naturally going to reflect your flaws, but you can improve them through nurturing. Although you cannot really fix or start anew, you can boost your score history by taking the right measures that will compensate over time. If your credit score needs upgrade, here are some do’s and don’ts you can take to improve your score in 3 months .
How to Improve Your Credit Score in 3 Months
Pay your bills on time. In an ideal world, all of our payments would operate like Netflix – it would quietly withdraw $7.99 from our account while keeping us distracted with Orange is the New Black. Unfortunately, we are responsible to meet deadlines. Do a thorough check on your credit report to see if there are any late payments or errors. Schedule reminders on your phone or computer and make sure they notify you a few days in advance. Quicken, Mint, and Capital One are some of the great online tools that can help you manage personal expenses.
Kill those debts. Delinquent payments and collections can affect your score adversely. Remember the seven-ten rule: any public record stays on your report for seven years while bankruptcies and unpaid taxes remain for a decade. Avoid this by being on time. If your financial situation cannot afford to get rid of debts, then talk with the company to see if they can grant an extension or set up an alternative payment plan. And remember: always opt to pay for the ones with the highest interest rates. Maximizing your budget towards eliminating debts for three months can make an impact on your score.
Become an authorized user, but not the primary holder of an account. This is tricky – you really need someone whom you deeply trust (family or spouse) that are willing get you a card with your name on his or her account. The pros are that it helps you build a payment history to your file and also increases the average age of the person’s account. The cons are that your score will depend on the primary cardholder – any undesirable features from your parents or partners will be literally inherited into your file. Only consider this option if there are responsible, trustworthy people around you whom you can, say, trust them with your life.
Check for identity theft regularly. Any offhanded transactions on your report need to be addressed immediately. For more information on how to deal with identity theft, click here.
Limit them down to 10-30% usage. To stay safe, professionals recommend only using 30% of your available credit. To stay golden though, they suggest utilizing less than 10%. Try not using your cards as much as possible. One simple, but highly effective strategy that I used was putting a sticker on my card saying “only in case of emergency.” It will make you re-think about spending.
Cancel unused credit cards as a way to boost your score. Because it won’t. Often people think this method will work in the short run, but it doesn’t and companies know.
Get new credit cards to have more options. It’s tempting, but can lead you to keep up with bad spending habits that need to be broken and accumulate more debt. In the short-run, it seems beneficial to have more access, but even three months are long enough to abuse them.
On a final note, make sure you only have credit cards that you need. Variety in this case actually hurts you, so opt for simplicity. Also, handling multiple credit cards can be laborious. Stick with what you need and build good habits that will get your report the shiny gold star.
Sun Jung Sun Jung is currently an undergraduate student at the University of Southern California majoring in English Literature. Born in South Korea, she was raised in Guadalajara, Mexico for seventeen years before coming to LA for college.