When is the last time you looked at your credit report? If you are even remotely involved in the real estate business the answer should be within the last thirty days. If you are not on top of your credit report you run the risk of having to deal with unexpected issues when you least expect them. Instead of utilizing lender financing when a new property hits the market you will be left scrambling for solutions. Improving your score can take as little as 30 days if you know the right improvements to make. If your scores are low and they need a boost there are a handful of moves you can make. Here are some ways to quickly improve your credit score:
- Remove Erroneous Accounts. Every day that an erroneous account stays on your credit your score will drop. It is critical that you know what is on your credit report at all times. The minute you spot something that is not yours or has been paid off you need to take action. An old collection account or charge off that is not removed pulls your score down. If the account has been paid you need to send any supporting documentation over to the three credit bureaus and have it removed. There are also credit repair companies that can help expedite this process if you need a rush. Without supporting documentation your task is much more difficult. You may have to go back years and track down an old lien holder or credit card. As difficult as it may be it is an essential part of restoring your credit score.
- Get Current. Every day that you are actively late on an account has an impact on your credit score. This is the case whether you are talking about a small credit card or a large mortgage payment. Your score will not stabilize until the accounts become current. Current does not mean remaining 30 or 60 days late. It means paying off the account until you are not late. Once the account is caught up you will see an increase each subsequent month. Getting caught up could mean consolidating from one credit card to another or taking money out of savings in the short term. You credit is judged, in part, on the number of 30, 60, 90 and 120 days late as you accumulate. The quicker you can get out of any hole and get current the quicker you will see a spike in your scores.
- Reduce Minimum Balances. It is understood that timely payments are a huge factor in determining your credit score. However most people aren’t aware that the balance in relation to the amount owed is a close second. You can pay everything on time but if your balances are too high your credit won’t be as strong as you expect. One way to quickly increase your scores are to pay down any high balances. Paying down a $900 balance on a $1000 credit card even just a few hundred dollars has a big impact. If your balances are high on multiple cards you should look into which balance transfer options are available. Paying down a few cards and shifting around some balances on a few others can increase your credit score by twenty points, or more.
- Sign up for Credit Updates. You should constantly have an idea of where your credit scores are. In the past getting your scores meant going through a third party vendor who had access to Transunion, Equifax or Experian. Today it is easier to find out where you stand. There are several companies who provide constant credit monitoring in addition to providing monthly credit score updates. You can even obtain a copy of your report through certain credit cards. Staying on top of your reports is an important part of avoiding fraud and erroneous accounts. The quicker you act when a fraud account is spotted the easier it is to deal with. The longer the account is on your report the more damage is done and more of a burden of proof you need to supply. Removing these items can become a time consuming nightmare that lowers your score every day. The first step in improving your score is finding a way to get your hands on a copy of your report every few weeks.
- Avoid Unnecessary Credit Pulls. A final factor in determining your credit score are the number of times your credit is pulled. A few credit pulls a month will not have any impact on your score. It is when you pull it a half dozen times or more in a 30 day span that your score will be impacted. Frequent credit pulls are seen as a sign that you are looking for credit and having a difficult time getting approved. If you do need a credit card it is best to go through one company that has multiple options instead of shopping around to ten individual companies. You may not think anything of it but you will see the impact the next time you pull your credit report.