There are several ways that person can quickly increase their credit score. Credit score is determined by the amount of debt that a person carries and how quickly they pay off that debt. This means that in order to quickly raise a credit score, a person should eliminate any unnecessary credit cards that they have and pay off any lingering debt. The longer a debt exists, the more negatively it affects the credit score of an individual that is trying to rebuild their credit. It is best to have only one or two credit cards. This is because the more cards someone has, the more likely it is that they were at one point in severe financial hardship.
Terminating any unused credit cards can temporarily cause a credit score to go down. However, adjusting balances onto existing cards and then quickly paying off the card is advisable. Furthermore, a person should consider the possibility that they should make some small purchases on a credit card every month so that they can pay off the card. Consistency in not carrying a large balance will immediately raise a credit score. Sometimes a person can put a large purchase such as a vehicle or even a small house on their credit card if they have a large credit line.
Paying off a large amount on a credit card will restore an individual’s credit score to the best of their ability. Taking a personal bank loan and paying off credit cards is usually a good idea so that the person is not paying incredibly high interest rates. If the credit is restored, a person can often zero out their previous bad credit within a few months to a year. It is very important that this individual does not get into the habit of overspending after they have cleared their credit. Sometimes a person taking a personal loan from a friend or family member to pay off their credit will get ahead quicker.
An individual that cannot pay their credit cards off should consider debt consolidation if they have more than $10,000 in existing credit debt. This will allow the individual to make a monthly payment plan that is more manageable and their credit will be restored. Sometimes going to a local church or civic organization for assistance to pay off debts can be helpful. Most of these organizations will require a person to complete a credit-counseling program before extending financial assistance to the individual. However, if a person is young and has made various personal financial mistakes, this can work to their advantage.