Thirty days may be insufficient to fully change your credit score. Anybody claiming they can do this for you in thirty days has an agenda and is attempting to sell you something. That said, thirty days should provide enough opportunity to create significant and quantifiable improvements to your credit score, particularly if you’ve previously had no interest in managing your credit and/or have quick fixes waiting to be identified in your current credit report.
This is not a collection of general tips; it is a sequential action plan, organized from greatest to least impactful, allowing you to prioritize the actions that will most improve your credit score.
Before you start: Pull your credit report
You can’t fix something if you don’t know it exists. First, pull your free credit reports from all three bureaus at annualcreditreport.com. What you’re going to look for is three things: errors on your report that shouldn’t be there, credit utilization ratios on your accounts (meaning a large amount of money owed against an account limit), and any negative reporting that will drop off in the near future.
This step typically takes 20 minutes and gives you direction on where to put your time and energy.
Week one: Fix what is wrong
The quickest credit score improvements will likely be achieved by correcting existing errors rather than generating new history. If your report reflects a late payment that was paid on time, a collection account that does not belong to you, or an incorrect amount for a current or past debt, the best thing you can do is dispute the items.
Bureaus are required to investigate all disputes within 30 days; therefore, file immediately so the bureau investigation may occur at the same time as the rest of your activities for the month. Correcting one error could result in as many as 40 points added to your score or possibly more depending upon the significance of the error.
As you complete your dispute process, verify if your rent payments have been reporting to your credit files. If they are not, using services such as Credit Genius and taking advantage of their “backdate” option allows you to submit months of historical rental payment data into the credit bureaus’ systems prior to the 30-day time limit.
Week two: Attack your utilization
Credit utilization represents approximately thirty percent (30%) of your overall FICO score. Credit utilization refers to the amount of your available credit being used. The greater the percentage of your credit card balance compared to the maximum limit for each card, the faster your score will improve by reducing those balances.
Ideally, credit utilization should be less than thirty percent (30%), although ten percent (10%) is even better. For example, if you have a card with a $1000 credit limit and a $700 balance, then your utilization ratio on that card is seventy percent (70%). Once you reduce your $700 balance to $300, your utilization ratio would now be thirty percent (30%), which could result in a noticeable score improvement when your next account closing date passes.
If you are unable to reduce your balances, there is another option. Consider asking for a credit limit increase on your current cards. An increase in your credit limit and the same amount owed on the increased limit reduces your utilization ratio. Many credit card companies provide the opportunity to request an increase through their website. However, prior to making a request to increase your limit, ask whether it would be considered a “hard” or “soft” pull.
Week three: Protect your payment history
Payment history is the largest portion of your FICO Score (35%) and is the most influential. Months of good credit behavior can be undone by one late or missing payment. In week three we will focus on ensuring no payments slip through the cracks.
If you haven’t set up auto-pay for each of your accounts to pay at least the minimum, do so now. Paying the minimum payment ensures protection of your payment history regardless of whether you’re able to pay off the entire balance. Paying an account completely reduces the impact of carrying a balance in comparison to simply paying the minimum.
If you have any accounts that are currently delinquent, it is imperative that they become current. When an account that has been delinquent becomes current it stops creating new negative entries and begins to create positive history again.
Week four: Add positive history where you can
By week four you’ve identified and corrected errors, minimized usage, and maintained your record for paying bills on time. Now that the dust from those steps has settled, you should consider creating new positive information about yourself in your credit report.
If there’s an outstanding issue related to the rent reporting process or if you’re still waiting for approval, check the current status of either. If you are currently enrolled through Credit Genius, and it has successfully submitted your request to “backdate” your membership into Experian, then the data is likely showing up on your Experian report by now.
If you don’t have any active credit accounts, but would like to create one (and considering a secured credit card is the most low-risk type), make one small charge and pay it off immediately. This will allow you to open a new credit account, with a new positive tradeline that adds no additional liability or risk.
What to realistically expect after 30 days
The potential for a wide range of results is possible based solely on where you start and what you find when you pull your credit report.
Depending on the nature of the error which has been resolved, you may have seen an increase of as much as 20 to 50 points (or more) if the correction of an error occurred. In addition, if you were able to reduce utilization from 70 percent to below 30 percent, an improvement of 20 to 40 points would likely result. However, using Credit Genius to add backdated rent history to your credit reports may allow for improvements of as many as 60 points or more, depending upon how strong the existing information is in your file.
On the other hand, if your credit report is free of errors, you do not have high utilization, and you have an excellent payment history, there will likely be very little incremental value added by an additional 30 days of reporting activity.
The actions in order of impact
Check for any errors before making changes. Next, lower utilization on higher balance accounts. After that, turn on automatic payments for every single bill. Finally, build new positive credit with either a rent-reporting service (if you are renting) or a secured card (if possible). Just be patient.
Credit scoring systems have to update each time your account information refreshes. Generally, this takes place at the end of a billing cycle. Therefore it can take as long as two to four weeks for the effect of the changes you made during week one to be reflected in your credit score.
By taking all those actions in week one, most likely the effects will show in your credit score sometime after 30 days.
The honest truth about 30 days
Focused action over one month can truly help to improve your credit score. While a single month of focus won’t allow you to suddenly fix a long-term history of missed payments or remove negative items that were reported correctly, what you can accomplish is to reduce barriers to improving your credit, ensure accurate reporting on your account, maximize those elements of your credit profile that are most easily changed and add positive reporting that has been missing from your credit file for too long.
This is no small feat. A 20-30 point improvement in the next 30 days may be the difference-maker for someone looking to rent an apartment, take out a car loan or purchase a home.
Start now. Get your reports. Dispute inaccuracies. Manage your debt. Time is ticking.
