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4 Ways To Quickly Improve Your Credit Score

According to a study by JPMorgan Chase earlier this year, one-third of Americans are dissatisfied with their credit score. Furthermore, 28% aren't confident their current score can help them accomplish their financial goals.
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According to a study by JPMorgan Chase earlier this year, one-third of Americans are dissatisfied with their credit score. Furthermore, 28% aren't confident their current score can help them accomplish their financial goals. Whether they are happy with their credit performance or not, 66% of all Americans still wish to improve their standing in 2016. Given the average credit score in America stands at 695 out of a possible 850, it's easy to see there's room for improvement. To help with the process, we outlined four quick things anyone can do to help improve their FICO score, and get one step closer to better interest rates and loan approvals.

  1. Increase your credit limit. One of the chief factors credit bureaus look at when determining your credit worthiness is what's called "credit utilization". That is the percentage of your total revolving credit line you actually use. You generally want this to be below 30%, in order to increase your credit score. One way to achieve this is by lowering one's spending. However, since altering one's spending habits is difficult, the other option is to increase one's credit limit - so long as you don't increase your spending, your overall utilization will go down as a result.

To do this, simply call up your bank and make a request. Be ready to have a number in mind as to what you would like your limit increased to. Also, have a good reason ready for increasing your limit. If you've recently started making more money, or paying less for your mortgage or rent, tell the representative over the phone about your new increased funds.

  • Check for errors on your credit history. A 2013 FTC study found that 1 in 10 consumers see see an improvement to their credit score after getting an error fixed. Sometimes these errors are simple mistakes on the part of agencies collecting data for the credit bureaus, and other times they are the result of identity theft. Either way, these can only be amended if you point the error out to the appropriate agencies.
  • The only way to catch mistakes on the report is by actively monitoring it. Every year, you can request a free copy of your credit report from each of the three credit bureaus - Experian, TransUnion, and Equifax. To get your free copy, you can go to the government-operated site AnnualFreeCreditReport.com.

  • Become an authorized user. If you are new to the credit game, one of the things that can be hurting your credit score is your average age of credit - another important factor that accounts for 15% of your FICO score. One way to help with this, is to be added as an authorized user to an old credit card account. If your parents have a credit card they've had around for ages, see if they're able to add you as an authorized user. If they do, the account and its total age will be added to your credit history, greatly boosting the average age of your accounts.
  • Before committing to becoming an authorized user, check whether or not the card's issuer reports these accounts to the credit bureaus. Some smaller regional banks will only do this if the authorized user is the main accountholder's spouse.

  • Take out credit-building loans. If you are willing to pay a fee to increase your credit score, it may be a good idea to take out a credit-building loan. One of the more often overlooked parts of one's credit score is account diversity. If all you've ever had was one credit card, your score won't be as good as if you had and paid off another type of loan. Credit building loans exist to help with exactly that. You can contact a local credit union to see whether or not such loans are available to you. Most major banks don't offer such services.
  • If this is your first ever credit account, and you don't have a credit report, it may take some time for this to actually take effect. According to Ethan Dornhelm, principal scientist at FICO, it can take up to six months after your credit report is created for a FICO score to be issued.