Bad credit can make it difficult to get loans, get the job you want, and get approved for rental properties. Is it possible to turn your credit score around in a short period of time?
But with some effort, you can improve your credit in 30 days. The key is to establish a budget, pay off debts, and stay on top of your credit card balances. If you remain committed, you can see a noticeable improvement in your credit rating.
If you're feeling lost and don't know where to begin, we have you covered. In this guide, you will learn essential tips to improve your credit score. But it's going to take some dedicated effort on your part. If you're ready to make a change, read on to get started.
How to Increase Credit Score Quickly
You have 30 days to increase your credit score. So, where do you begin? When it comes to managing money, you have to create a system to help you keep track of your spending. The following tips will guide you through the necessary steps in getting your credit back in good standing.
Create a Budget
The first step of your 30-day challenge is to create a budget. A budget will help you see all the money coming in and going out, which will make it easier to stay on top of your credit card balances.
If you don't have a good idea of how much money you're spending every month, it can be hard to stay on top of your finances. But by making a list of what you use your income for, it'll be easier to get rid of any unnecessary expenses that are draining your bank account.
Please note that a budget is more than just numbers—it's about priorities. By creating this list, you'll be able to prioritize what's most important to you financially. And if something isn't important enough to spend on, then you'll know that cutting back somewhere else will have little impact on the quality of life that you enjoy.
Write Down Your Goals
The next step is to write down your goals. What do you want to accomplish in the next 30 days? Are you trying to build up your credit score to get a new car, improve your savings account balance, or maybe even buy a home? Whatever it is, write it down.
What is your desired outcome? Why is this important to you? What is one thing you can do now that will help you achieve these goals? If you think of something that relates to your credit standing and spending habits, make a note of it and work it into your budget where possible.
Pay off Debts
To improve your credit score, it's important to pay off debts. Paying off your debts will reduce the amount of credit you're using and show potential creditors that you're committed to paying back the money owed.
The first step is to identify which debts need to be paid off first. You then need to take care of those debts as soon as possible because the longer you wait, the more interest will accumulate, and your debt will grow even more.
After you've taken care of those debts, it's time to look at your other expenses and make a budget for those expenditures, as well as those for debt repayment. As such, you will be adding these expenses to your existing budget.
It's important to avoid overspending so that you can pay off any remaining balances on time and establish a good credit history.
Stay On Top of Credit Card Balances
Credit cards are a convenient way to make purchases. And while they're easy to use, it can be difficult to stay on top of your credit card balance. Therefore, one of the first things to do when you start this challenge is to put some money aside.
This is so you can pay your credit cards on time every month. If you don't have enough money to pay your credit card balances on time, try transferring your balance instead. There are also some other ways to manage this process and establish better credit card habits.
For starters, you should set up automatic payments if possible. Automatic payments can help you avoid late fees by ensuring that you pay your bill each month. If the bank allows for automatic payments, it's worth looking into this option so you never miss a payment deadline again.
Plus, if anything happens with your bank account, you will always have the cash in your account to cover any missed payments. Moreover, you can sign up for automatic alerts via text message or email. This is an excellent way to stay in the know without having to constantly check in with your credit card company each day.
And if you're interested in automating the entire process and don't want to manually input information like date and amount spent each time, there are plenty of apps available that do this for you. It makes it easy for you to save both time and money when tracking expenses related to your credit card bill.
It's been mentioned already, but it bears repeating: Avoid charging things that aren't necessary. It may sound obvious, but you'd probably be surprised by how much you spend on items that aren't essential. If you want to make a difference in your credit score, you have to get radical about your spending habits.
Related post: Will Your Credit Score Go Down If You Check It?
Consider Refinancing Your Home
If your credit score is low, you may be eligible for a home equity line of credit (HELOC) or home equity loan. These loans can help improve your credit score very quickly. By refinancing your home, you may be able to refinance at a lower interest rate and make monthly payments that fit your budget.
Once you've paid off the remaining balance, the HELOC becomes an asset that will help boost your credit score. This is especially important if you're looking to buy a house in the near future. A high credit score makes it easier to get approved for a mortgage. If you want to know if it's possible for you to refinance your home, reach out to someone who specializes in this area. There are many resources available to you online that will assist you in this area.
Make Sure You Check Your Credit Report
Another important step in this 30-day challenge is to make sure you check your credit report. You can get a free credit report from the three major national credit bureaus: Experian, TransUnion, and Equifax. Not all of these reports are accurate 100% of the time, so make sure you review them for accuracy. Make a note of any mistakes or discrepancies and follow up with the bureau about fixing them.
Further Reading: Does Your Credit Score Start At Zero?
Start Building Credit with Small Purchases
You can build your credit by making small purchases and paying them off right away. If you use a credit card instead of cash, it might be tempting to buy something you can't afford or that you don't need. But if you use a prepaid credit card for such purchases, the temptation will be eliminated. The money has already been spent and paid for, so there's no reason to spend more than what you have.
You can factor these small purchases into your budget. And it will be easier to stick to your budget because you've already eliminated unnecessary purchases. If need be, invest in a secured credit card.
Secured cards require a cash deposit to show the bank you're willing to take on the responsibility of paying off your debt. After making your first purchase, that initial deposit will be refunded to you as long as you don't go over your limit and make payments on time.
What Is the Point of Having a High Credit Score?
A high credit score can mean getting really low-interest rates on your mortgage, car, and student loans. Higher credit scores also make it easier to get approved for new lines of credit (like credit cards) and to rent an apartment.
Furthermore, the higher your FICO score is, the less often you'll be turned down for an auto loan or mortgage. At its most basic level, your credit score is just a report card on how responsible you are with money. But when you make a financial decision—whether good or bad—it goes on your credit report for lenders to see. If you've not used your money wisely, lenders will be hesitant to approve you.
If you are looking for a way to improve your credit score in 30 days, follow these 7 steps. But don't forget, it's not just about the money. Improving your credit score will let you take more control over your life. You'll be able to get the things you really want or need for your family and not have to worry about being rejected because of your credit history.
Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author. He's been featured on The Consults Corner on TAE Radio, The Writing Biz, What's Your Story, and more.