Many financial experts like to say there’s no guarantee you can significantly change a credit score in a mere six months.
However, those same experts have an entire arsenal of actionable tips designed to help you make significant progress (which we’ve shared below) if your mission is to not only get your credit score on the right track, but to do so quickly.
Credit scores help lenders assess risk when issuing loans. A higher credit score (lower risk) typically translates into reduced interest rates, better credit card offers, and less expensive insurance premiums, among other benefits, all of which can result in massive savings over the course of a lifetime.
At the national level, Americans are incurring more and more debt. Recent data from the New York Fed indicates that household debt reached a new high in the fourth quarter of 2017, standing at $13.15 trillion. This represents a 1.5% increase from the previous quarter and a 17.9% increase from the most recent low in Q2 2013.
The average indebted household that doesn’t pay credit cards in full each month carries $8,683 in credit card debt. Eventually, that debt affects the card members’ credit scores.
A credit score impacts the ability to borrow money, leading to higher interest rates, bigger down payment requirements and possibly longer loan terms to make the higher payments affordable. Low credit scores can also affect insurance rates, car and home loans, the ability to get a job and rent an apartment.
By cutting back on debt, consumers can improve their credit scores and make their financial lives a lot easier.
If your credit score jumped 20-40 points last summer, you may see another boost in May as the credit reporting agencies finish changes to remove incomplete identifying information from credit reports.
On April 16, the credit reporting agencies Equifax, Experian and TransUnion implemented the final changes to a plan it agreed to and started in mid-2017 to remove tax liens and civil judgments from credit reports. Without such information to hurt their credit reports, some consumers could start seeing their credit scores rise in May, just as they did last summer when the first half of the changes were implemented.