Let's start with the caveat: It takes time to rebuild credit gone bad. Most red marks don't come off your credit report as soon as you address your issues. Missed payments, collection accounts, charge offs, defaults — they "age off" files after seven years. But you don't have to wait that long to improve your credit. It'll take more than five minutes, for sure, but there are a few ways to give your credit score a boost in 30 days or less.
You can't erase missed payments, but you can quickly improve your credit-to-debt ratio (the second biggest influencer on credit scores), especially if you've got a bunch of credit card debt. Creditors report your outstanding balances to the credit bureaus every month. So paying off that debt — or at least a big chunk of it — before your statement closing date should net you some points. Just make sure you don't run that bill right back up or it'll all be for nil.
Genius tip: For primo credit score results, keep balances on your credit cards below at least 30% of your total credit limit(s). The lower, of course, the better.
Account status also gets reported to the credit bureaus every 30 days or so. Getting an account out of default (meaning your last payment is still past due) or paying an outstanding collection account won't negate the stuff that led to the slip(s). But credit scoring models will judge accounts "paid as agreed" less harshly. Plus, you'll preclude more missed payments from hitting your credit file.
Genius tip: Collection accounts can stay on your credit report for for seven years plus 180 days from the original date of delinquency, but newer credit scores are ignoring paid collection accounts entirely.
By law, credit bureaus have 30 to 45 days to investigate and resolve credit report disputes. So if you've got a legitimate error keeping your score down, you could get some points back in that timeframe. You can check your credit reports for errors by pulling them for free at AnnualCreditReport.com. (You're entitled to one report from each big credit bureau — Equifax, Experian and TransUnion — every 12 months.) And, yes, even credit mis-steppers should check for erroneous dings. Per the Federal Trade Commission, one in five Americans have an error on their credit report.
Genius tip: If you find an error on more than one, you'll have to file a separate dispute with each credit bureau. They don't talk to each other about that kind of stuff. You can learn more about disputing errors on your credit report here.
OK, ixnaying new credit applications isn't going to boost your score, but it will keep those digits from taking a small hit. Credit inquiries account for about 10% of your credit score. A fresh one usually costs less than five points, but too many in a short timeframe aren't a good look. Lenders think you're desperate for credit and due to overspend. Plus, if your score is on the bubble of bad, every point counts.
Genius tip: Credit inquiries stay on your credit report for two years and only affect your credit score for 12 months.
New negative information will deal more damage, but, more importantly, credit scores reward good behavior over time. Make all your loan payments on time (set up auto-pay to avoid needlessly missing due dates), keep debt levels low and add new accounts slowly over time and you'll be well on your way to a great score.
Genius tip: Need to sock away money so you never miss a bill? Here are some ways to save more in five minutes or less.
Image: Nastia Kobzarenko
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