One of the most frequently asked questions concerning credit scores is, “Can you raise your credit score?”. It’s a testament to just how little people know about this important topic. And that’s not something to be ashamed of. Personal finances are one of those things that people don’t learn about until they need to; it’s something that escapes us as youngsters, creeps into our lives as teenagers and young adults, and then hits hard when we’re 20-somethings dealing with masses of debt.
But it’s never too late to learn. In this guide, we’ll take answer the most frequently asked questions about credit scores.
Can You Raise Your Credit Score?
Your credit score is constantly changing, altered by every bank account you open and every debt you pay. If it’s below 850, the maximum credit score, then you can raise it.
Generally speaking, whenever you open a new account, default on a debt, miss a payment, or receive a hard inquiry, your score will suffer; whenever you pay debts, meet repayments, and reduce the amount of used credit, it will improve.
Can You Do it in 3 Months?
There is a lot you can do in three months to improve your credit score. In the next section, we’ll discuss some 30-day techniques that you can utilize. All of those techniques apply here as well, but you can also try the following:
- Pay More: Creditors only report once per month, which means that even if you clear your credit card balance every month, it may still adversely impact your score. The best way to get around this is to make two payments each month, breaking that one big payment into two equal ones. You won’t pay any more money, but your credit score will look decidedly better.
- Negotiate Debts: If you have any debts in collection status, then your score may have taken a significant hit. But you can clear these very quickly if you contact the collection agency and settle. Remember, they bought your debts cheaply and their goal is to profit, clear, and move on. Offer them a reduced lump-sum amount to clear debts quickly.
- Be Authorized: If you become an authorized user on someone else’s credit card, you’ll benefit from the increased credit limit without taking on any extra debt. Find someone who loves you and trusts you (a partner, a parent), make sure they are not heavily in debt, and let them know that you have no intention of using the card. The next time your report is updated, you should notice an immediate improvement.
Can You Do it in 30 Days?
The more time you have, the better, but if you don’t have 3 months then it is possible to make some big changes to your credit score in just 30 days.
- Remove Mistakes: The first thing you should do is request a credit report from each of the three big bureaus. You are entitled to receive at least one per year for free. Scrutinize the reports. Look for inaccuracies, mistakes—anything that is negative and doesn’t belong there. Once you find them, dispute them and this will remove them from your report.
- Pay Down: Next up, it’s time to clear as much of your balance as possible. 30% of your credit score is calculated based on amount owed vs amount available, with 30% or less being the ideal amount. For example, if you have a $100,000 limit and $60,000 of debt, you’re using 60%. The lower this figure is, the higher this portion of your score will be. If you have the money, put it towards reducing your debts. It’s not all or nothing—they don’t need to be cleared 100% for your score to benefit.
- Increase Your Limit: Your credit utilization ratio can also be improved by increasing your credit. Don’t open any more accounts, as that will have a negative impact in the short-term. Instead, call your current creditor and ask them to increase your limit.
Does Fingerhut Lower Your Score?
Fingerhut creates a new credit account, which means it registers as a hard inquiry and will reduce your credit score temporarily.
Fingerhut is an online shopping portal that offers installment plans. It can be useful for consumers with poor credit who need to make a few essential purchases, however, not only will it temporarily reduce your score, but the products listed on the site are more expensive than they are elsewhere.
Does Fingerhut Raise Your Score?
If you make payments on time then your score will gradually improve, just like it would with any other credit account. Fingerhut doesn’t offer anything different in this regard, but it is more accepting of users with low credit scores.
Does Affirm Reduce Your Score?
Affirm uses a soft credit check when you apply for a loan, which means it won’t reduce your score or appear on your statement. However, if you proceed with an Affirm loan this may appear on your credit report as they report to the major credit bureaus.
Does Affirm Raise Your Score?
As with Fingerhut, using Affirm can improve your credit score. It’s designed to help you make essential purchases and to establish installment plans that appear on your credit report. By meeting these repayments you’re proving to future creditors that you can be trusted.
What Can Raise Your Credit Score?
There are numerous things that can raise your credit score quickly, some of which we’ve discussed in this guide. Take a look below to see how your score is calculated and what you can do to improve it:
- 35% = Payment History: Pay on time, avoid delinquencies.
- 30% = Amount Owed: Keep your available credit high when compared to your total debt.
- 15% = Age of Accounts: Keep credit cards active, even when the debts have been cleared. This will also help with the Amount Owed section above.
- 10% = New Credit: New credit accounts can adversely impact your score, but their impact will lessen over time.
10% = Types of Credit: The more types of credit you have, the better, as lenders want to know that you’re capable of handling multiple types.
When you order Nachos BellGrande at the Taco Bell drive-thru on Wednesday, April 21, you can request a job as well. The fast food empire is hiring 5,000 people at “hiring parties” in parking lots at 2,000 stores throughout the country.
The chain is growing toward its goal of operating 10,000 stores across the globe by the end of the decade, according to a hiring announcement. Taco Bell currently has 7,000 company-owned and franchise locations in the United States and 600 in other countries.
The jobs available vary based on location but include all levels, from “bellhops” who take orders on tablets at drive-thrus, to general managers. Click here to see what positions are open in your area. Interested candidates can fill out an application on that same site in advance or do it in person at a store on Wednesday
Not every Taco Bell is having a hiring party so job seekers should go to TacoBell.com/locations to get phone numbers of stores near them and call to see if they are participating in the event.
Taco Bell will interview candidates outside in order to follow COVID-19 precautions. In some locations applicants won’t even have to get out of their cars. Everyone must wear a mask and stay six feet apart. You can bring a resume and references, but that is not necessary, according to Meagan Ashner, a spokeswoman for Taco Bell.
“While we are hopeful for strong, qualified talent among all applicants, attending a hiring party does not guarantee a job,” she added.
According to Indeed.com, Taco Bell’s wages start at $10.26 an hour for kitchen team members. A shift manager can make $23,494 a year and an assistant manager can make $43,969.
The restaurant gives employees a free meal during a shift, according to Indeed.
Benefits for general managers of company-owned stores have recently been expanded to include up to four weeks of accrued vacation a year and four weeks of “baby bonding” time for new parents and guardians. The company also offers eight weeks of fully-paid short term disability after the birth of a child.
Taco Bell fared well during the pandemic, adjusting quickly to the shutdown of indoor dining. The drive-thru was already a key part of its business, and the chain made it easier for customers to order and pick up food.
The rollout of new “Go Mobile” stores this year is fueling part of the need for more employees. These smaller restaurants cater only to digital orders and drive-thru pickups.
Katherine Snow Smith is a senior writer at The Penny Hoarder.
An airline credit card with an insane rewards program was released recently and you just have to have it. Or, the apartment of your dreams just popped up on Padmapper and you need your name on the callbox, like, yesterday. So –– naturally –– you use one of your free annual credit checks through Experian, Equifax, or TransUnion to check up on things, and suddenly you find yourself in crisis mode: why is my credit score lower than it was last time I checked?
In the life of a grown-up, there are few feelings as anxiety-inducing as the moment when you get your credit report back, only to find that it’s not nearly as high as you anticipated. But fear not: there are a variety of perfectly good reasons why your credit score has taken a hit, and in this case, knowledge is power. The more you know about how your credit score operates and what can affect in, the easier it will be to get it back up to scratch.
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Here are 6 reasons why your credit score might have dipped:
1. You’re Using Too Much Credit
For many of us who have had a limited financial education, it can be hard to figure out how best to use credit. You might be a perfectly upstanding citizen who pays their bills on time every month, but it’s going to take more than that to keep your credit score low. Enter credit utilization.
While your credit limit might seem like the number not to exceed on your credit card, experts actually recommend that to minimize negative credit impact, you should only be using 30 percent of your credit allowance. That means if you have a $9,000 credit limit, you should not exceed spending more than $3,000 before making a payment. This might seem a little counterintuitive, but the reality is credit restrictions like this are put in place to protect you. By spending much lower than your credit limit, you decrease your interest payments and ultimately your debt.
2. You Accidentally Missed a Payment
Listen, it happens to everyone. Adulting is hard and sometimes, life gets in the way of life. With so many responsibilities to juggle, it’s not unusual or shameful when something falls off your priority list. If you do miss a payment, don’t panic. Consider calling the credit card company or lender to ask them to remove the fee –– especially if you’ve never missed a payment before. Then, pay the balance as soon as possible.
If automatic pay isn’t an option with your bank or lender, it might be helpful to set a calendar alert every month to remind you to pay your bill. If this wasn’t simply an accident and you purposefully let the bill fall by the wayside due to constricted funds, consider talking to a credit repair agent to discuss your options.
3. You Cleaned House on Your Old Credit Accounts
Especially if you’ve had good enough credit to open an elite credit card with an excellent rewards program, it makes sense that some of your very first credit accounts are collecting dust. It might seem financially responsible to clean house financially and close some of your older or neglected credit accounts, but consider this: your oldest accounts are also your greatest and longest source of credit history. If you close them, the pool of information that dictates your credit score will shrink, making you more vulnerable to credit report dingers.
Instead of closing your old accounts, it might make sense to use them sparingly to your advantage. For example, maybe you only use one card when you fill up your car’s gas tank, and then pay it off right away. This kind of calculated credit maintenance will only help your credit score. Just don’t forget to pay the bill!
4. You Paid Off a Big Loan
You finally did it: you paid off that nagging, horrible student/car/home loan, and what do you get for it? A reduction in your credit score. So what gives?
The reason paying off a loan can affect your credit is because it decreases the diversity of your credit in the eyes of lenders. This is similar to what happens when you close old accounts: when the number of credit resources decreases, your credit imperfections –– like missing a payment or two, or going over 30 percent on your credit utilization –– become more visible.
While this might be frustrating, rest assured that the impact of paying off a loan will not have the same kind of enormity that other items on the list will. Paying off a loan is a major win, and should be celebrated accordingly.
5. You Applied for a Loan or a Credit Card
When you apply for any kind of credit, the lending institution will run what’s called a “hard inquiry” or “hard pull”, which is a formal credit check that requires your approval. This check is intended to give lenders an opportunity to evaluate your reliability as a loanee, and sometimes will take a few points off your score.
While a few points here and there won’t ultimately impact your credit score, repeated attempts to secure new means of credit –– like persistently applying for credit cards that are out of your credit league –– will. Lenders think that you’re desperate for credit, which isn’t a good look for you, or your credit history.
Make sure that when you are researching credit cards, you keep in mind your personal financial history, credit score, and payment reliability, so you can select and apply for a card that makes sense for you.
6. A Derogatory Mark was Added to Your Report
If you’ve recently gone through a bankruptcy, foreclosure, or even a civil judgement, it probably isn’t a surprise to you that your credit has been impacted. Any abrupt changes to your credit can seriously affect the number that shows on your credit report. Unfortunately, unlike the scenarios listed in previous points, these derogatory marks are the result of what lenders consider major delinquencies –– in other words, significant implications about your ability to manage your finances.
If a derogatory mark is added to your credit report, it’s important to get assistance as soon as possible. A credit repair professional can help you filter through the overwhelming information and requirements to find a solution that works best for your unique situation. If you do see a derogatory mark on your credit score that you don’t recognize, follow up.
Get It Now
If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get a free credit score updated every 14 days.
You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.
It may feel like everywhere you turn, is another opportunity for your credit to get dinged. Between loans, credit cards, and bills, it can feel overwhelming to try and rebuild credit once it’s already suffered some setbacks.
However, that doesn’t mean your financial situation is ever hopeless. It may take some time, but rebuilding your credit is doable for anyone with smart financial habits. Here’s the some important principles that will guide you out of the vicious cycle of poor credit:
1. Get Your Finances in Check
If you haven’t already it’s time to check your credit report, to understand where you fully stand. Next, if you still have any outstanding bills owed, or can’t afford to make minimum payments on your card, consider paying those off. They may continue to affect your credit score until every overdue bill is paid. While you may feel a little in over your head, there are several ways to reign in your money:
Set up a Budget: Even if you already have a budget in place, if you’re trying to rebuild credit, you’ll likely need to reassess. Take account of all your expenses, and then average them out over the last six months. Once you see all your spending in place, it may shock you where your money has been going. Wherever you can,
Work with your creditors to pay debts: If you can’t clear all your outstanding bills at once, you can talk with creditors to set up new payment plans or defer payments temporarily. While not every lender will be open to working with you, there will likely be more than you expect. Ultimately it’s in both party’s best interest to come to an agreement on a plan and timeline that you can actually achieve. However, it’s possible that a plan like this may have an initial negative impact on your credit score.
2. Build Positive History
One you have a plan in place to avoid detracting from your credit score, next you’ll focus on steps that will help demonstrate a responsible use of credit. There are several ways to do this.
Try a secured credit card: A secured credit cards allows those with limited or poor credit history to open a credit line. They make a deposit that acts as collateral in case they miss a payment. Though the credit limit is often low, these cards were designed with rebuilding credit in mind. Many card issuers report to all three credit bureaus, and as long as your account remains in good standing, your credit score will likely increase.
The requirements and benefits will vary by each secured credit card, so be sure to do your research into which card is right for your needs before applying.
Become an authorized user: Ask a friend or family member to add you as a user on their credit card. You don’t have to use the card itself — simply being on the account can help to raise your credit score. The downside is that it is possible for their late payments to affect you as well. Make sure you choose someone who you trust, and make sure they’re paying on time.
Try a credit-builder loan: Designed specifically for those who want to build and rebuild credit, these loans are typically issued from small banks and credit unions. The amount of the loan will be deposited into an account, and you’ll make regular payments to the bank, which they report to credit bureaus. At the end of the terms, you’ll receive the money and have benefited from the positive history.
Report the bills you pay: While on-time rental payments aren’t usually reported to credit agencies, there are services out there that allow you to get credit for paying your monthly bills on time. If this is something you already do, it might be an easy way to give your credit score a boost.
3. Continue Making Smart Financial Decisions
This is a step that may seem like a no-brainer, but when it comes down to the specifics many people slip up. When trying to rebuild your credit, it’s important to become more aware of the way you tend to manage money and make an effort to fix it.
Keep utilization low: Your credit utilization is the ratio of your current debts to credit limit, also known as your debt to credit ratio. Using most of all of your credit may negatively impact your credit score as it is a sign that you are a great risk to lenders. To indicate you can manage all of your debts responsibly, it’s a good idea to keep your utilization around 30 percent.
To lower your credit utilization, you can either pay down your debts, or ask for a credit line increase. Increasing your credit line may cause you to spend more in the long run if you’re not careful, so it may be a better idea to simply focus on paying down your debts to begin with. Once you pay a card off, make sure not to close out the card, or your credit limit will be reduced. Try putting paid off cards in a drawer out of sight if you feel tempted to use them.
Don’t open too many new accounts: While it can be tempting to apply for several new rewards cards once you qualify, don’t fall into this trap. Opening too many new credit lines may negatively impact your credit. In addition, you risk racking up more debt than you can afford to sustain.
How Long Does it Take to Rebuild Credit?
The short answer is: It varies. The good news is that everything will eventually leave your record. Most things take 7 years, while other items like bankruptcy take 10 years.
Practicing responsible use of your credit, sticking to your budget, and paying your bills on time, you may see a positive improvement in as little as a year. That may still feel like a long way off, but once you get into the habit of managing your money responsibly, the time will fly.
Sources: Wisebread | Experian
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