Many people have failed to increase their credit score because they do not dare to set their goal high enough – for instance, setting their target credit score to 730 or above, which is the range of excellent credit score. Some people would find it unrealistic since it's hard for those who have bad credit to achieve such high target score within short period of time – ie less than a year.
The formula of "boosting" your credit score to the highest level can be achieved by following the "SPKT" method.
- SCOUT your credit report for any reporting errors – First of all, you need to obtain credit reports from different credit bureaus like Equifax, Experian and TransUnion. If you haven't obtained these reports yet, you can actually get them online from AnnualCreditReport.com as consumers are eligible to get free credit report from these credit bureaus once a year. Make sure that you key-in the right domain name "AnnualCreditReport.com" in order to avoid visiting the wrong website. If you have found few errors from the report, you have the right to dispute the errors.
- PAY OFF your debt as soon as possible – You must not avoid paying off your debt when you seriously want to reach the excellent credit score range. If you often miss the payment due dates – set a reminder to notify you when you should make your payments accordingly like mortgage repayments, credit card debt payment and etc. If you want to pay off your debt fast – put on more effort on paying more than required on monthly basis. Besides that, you are required to manage your spending wisely by practicing a frugal lifestyle.
- KEEP your account balances low – Credit utilization has impact on your credit as your score tends to decrease if you utilize more than 50% of your credit limit. It's common mistake when people tend to cut off their accounts when they could not maintain their credit utilization. Don't ever try to close your accounts immediately and try to maintain 10% – 20% range of credit utilization.
- TRACK your credit score every 3 months – If you keep practicing the above-mentioned methods earlier, you need to keep track of your credit performance every 3 months. It would take a few months (at least 3 months or above) to see the actual results.
In conclusion, you need to aim for excellent credit score range (730 or above) and do whatever it takes to achieve your goal by practicing this SPKT method.