You could elevate your credit score with tips such as making on-time payments, paying credit card bills more than once a month, becoming an authorized user and fixing credit report errors.
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Want to raise your credit fast and build a good score? Look for things such as a missed payment, a high credit card balance or a mistake on your credit report for a quick boost. If the problem is a thin credit file, there are ways to build your credit at a pace that feels right for you.
Get free copies of your credit reports to diagnose what might be dragging your credit down. Its important to identify whats affecting your score so that you can pick the right set of strategies for you. Weve listed nine options below.
Getting ready to buy a car but worried your credit isn’t up to par? Improving your credit score quickly before purchasing a vehicle can help you get approved for an auto loan and score a lower interest rate. This saves you money over the life of the loan.
Kelly Blue Book says that the average price of a new car in 2022 was over $47,000. Since interest rates are also going up, it’s important to get the best deal on your car loan. The higher your credit score, the more likely you are to get the lowest interest rate a lender offers.
While it takes time to build credit there are steps you can take to give your credit a boost in a short period. Implement as many of these 10 tips as possible to fix your credit quickly before buying a car
1. Review Your Credit Reports
The first thing to do is pull your credit reports from Experian, Equifax and TransUnion. You can get free copies of these reports weekly through AnnualCreditReport.com.
Review your reports to spot any inaccuracies dragging down your scores. Common credit report errors include:
- Accounts that don’t belong to you
- Incorrect account status, such as an account listed as open that you closed
- Late payments you paid on time
- Incorrect balances or credit limits
Dispute inaccurate information by contacting the credit bureau that reported it. This can bump up your credit scores if the disputed item is removed.
2. Pay Down Credit Card Balances
High credit card balances can negatively impact your credit scores in two ways:
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Your credit utilization ratio shows how much of your available credit you are using. It is calculated by comparing your total credit card balances to your total credit limits. Experts recommend keeping your utilization below 30%.
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Through potential late payments – The higher your balances, the greater chance you’ll miss payments and hurt your credit.
Aim to get your balances as low as possible by paying more than the minimums. Knock out small balances first if you can’t wipe them all out.
3. Become an Authorized User
Ask a family member or friend with great credit to add you as an authorized user on one of their longstanding credit card accounts. This can give your credit a boost quickly since their account history gets added to your credit reports.
Make sure they pay on time so that your credit doesn’t get hurt. And ask the card company to report the account to the credit bureaus using your Social Security number. This way, it will show up on your credit report.
4. Limit New Credit Applications
A hard inquiry is made on your credit report every time you apply for new credit. For lenders, too many hard inquiries in a short amount of time can be a red flag and hurt your credit scores.
Limit applications to one or two for a car loan so you don’t accumulate unnecessary hard inquiries. Checking your own credit counts as a soft inquiry that won’t affect your scores.
5. Ask Creditors for Goodwill Deletions
If you have any recent late payments, call your creditors to ask if they’ll remove them from your credit reports. This goodwill deletion can boost your scores, especially if the late pays are recent.
Send a goodwill letter if you can’t get through on the phone. Emphasize that you’ve been a loyal customer and this was an isolated incident. Don’t admit fault or the creditor likely won’t do it.
6. Pay Down Collections Accounts
Outstanding collections accounts seriously drag down your credit. Paying off collection balances won’t remove them from your reports, but it can boost your scores since the balances will show as zero.
If you pay a collection account in full, also ask the collector to remove it from your credit reports as a condition of your payment. Get this agreement in writing. The collection will continue to hurt your credit scores until it’s deleted.
7. Become an Authorized User Again
If one authorized user account wasn’t enough to give your credit the boost it needs, ask another friend or family member with solid credit if you can become an authorized user.
The second account will further increase the depth of your credit history. Just be sure this person makes on-time payments so the account doesn’t damage your credit down the road.
8. Dispute Collections Accounts
If you have collections accounts you don’t recognize or believe are inaccurate, dispute them with the credit bureaus. Prove the debts aren’t yours or ask the collector to validate the debt belongs to you.
If collectors can’t verify the debt, the credit bureaus will remove it from your credit reports. This can provide a nice score boost.
9. Pay Off an Installment Loan
Paying off an installment loan, like a personal loan or auto loan, can quicken your credit score improvement. This eliminates that open account from your credit reports and can boost your scores, especially if the loan had a long history.
Paying off an installment loan is ideal because you keep the history of on-time payments on your credit reports even once the loan closes. This continues helping your credit for many years.
10. Add Positive Information
One of the fastest ways to build credit is to add new positive information to your credit reports. Besides becoming an authorized user on others’ accounts, you can add favorable accounts by:
- Opening a new credit card and making on-time payments
- Taking out a credit-builder loan and repaying it diligently
- Getting a secured credit card and charging small amounts you pay off monthly
- Becoming an account holder on a utility bill, cell phone bill or streaming service account and paying on time
Adding positive accounts shows lenders you can handle various types of credit responsibly. Mixing different credit types also improves your credit mix, which makes up 10% of your FICO® Score.
Turn Bad Credit into Good
Raising your credit scores in a hurry before applying for an auto loan takes diligence and patience. But implementing most of these 10 tips can help you boost your credit quickly so you can get approved for a car loan and score the best terms.
The higher your credit score, the lower the interest rate and monthly payments on your new car. And fixing your credit before submitting a loan application saves you money over the long haul.
Test your FICO® Score through Experian anytime for free to check your progress. Keep your credit utilization low, dispute errors, and add positive information. With time and commitment, you can go from bad credit to good credit for an auto loan before you know it.
Ask for higher credit limits
When your credit limit increases while your balance stays the same, it immediately lowers your overall credit utilization, which can improve your credit. If your financial situation has improved, such as an increase in income or more years of positive credit history, youre likely in a good position to request a higher limit.
However, before asking for a credit limit increase, plan how youll keep your spending habits steady and avoid using the additional credit. If those higher limits are a temptation, this might not be the best strategy for you.
SCORE IMPACT: Highly influential, because utilization is a large factor in credit scores.
TIME COMMITMENT: Low. Contact your credit card issuer to ask about getting a higher limit. Try to stay away from “hard” credit checks, which can lower your score for a short time.
HOW FAST IT COULD WORK: Fast. Once the higher limit is reported to credit bureaus, it will lower your overall credit utilization, provided you dont spend the additional available credit.
Pay bills on time
No strategy to improve your credit will be effective if you pay bills late. Late payments can stay on your credit reports for seven years.
If you miss a payment by 30 days or more, pay the outstanding balance immediately. After that, call or chat with the creditor and ask if they will think about not reporting the late payment to the credit bureaus. Youre more likely to have success with this approach if this is a one-time occurrence and you have a record of on-time payments.
Even if the creditor doesnt agree to your request, it’s still important to bring your account up to date as soon as possible. Each month that an account is marked delinquent hurts your score.
SCORE IMPACT: Highly influential. Your payment history is the largest scoring factor in both FICO and VantageScore credit scoring systems.
TIME COMMITMENT: Low. Prevent missed payments by setting up account reminders and considering automatic payments to cover at least the minimum.
HOW FAST IT COULD WORK: This varies, depending on how many payments youve missed and how recently. It also matters how late a payment was (30, 60, 90 or more days past due). Fortunately, the impact of delinquent payments fades over time, and adding more positive credit accounts can help to speed that up.
How To Fix A BAD Credit Score ASAP
FAQ
How do I fix my credit ASAP?
To quickly improve your credit score, focus on making on-time payments, reducing your credit utilization, and disputing any inaccuracies on your credit report.
What is the fastest way to raise your credit score to buy a car?
The best things you can do to improve your credit are to pay your bills on time and settle your credit card balances. Issuers report your payment behavior to the credit bureaus every 30 days, so positive steps can help your credit quickly.
How to fix your credit score to buy a car?
Pay Off Debt: It should go without saying that paying off your debt will help your credit score. Try to make more payments on student loans, personal loans, and mortgages. This will help you when you go to apply for an auto loan.
What is the 20/4-10 rule for buying a car?
The 20/4/10 rule is a guideline for car buying that suggests a responsible approach to financing.