Having a low or subprime credit score can be harmful when you’re trying to progress in life.
When you want to buy a home and need to be approved for a mortgage, or need a new vehicle and need a car loan or motorcycle loan.
A 400 credit score is going to leave you in a tight spot, so it is better to learn how to improve a 400 credit score.
You can take a few steps on your own and you can hire a credit repair service.
First, we will touch on some tactics you will handle yourself. Then, we will touch on how credit repair companies can advise and do some work for you.
- Payment History (35%)
- Credit Utilization (30%)
- Length Of Credit History (15%)
- New Credit (10%)
- Mixed Credit (10%)
Want Help Removing Items Off Your Credit Report?
You can pick and choose which section you’d like to attack but we suggest your focus on the credit utilization ratio. Credit Utilization is your credit to debt ratio.
It is the ratio of your outstanding credit balances to your credit limit.
So, if your amount owed is $50 and your credit limit is $100, then your credit-to-debt ratio (or credit utilization) is 50 percent.
You can use these tactics to learn how to improve a credit score starting at 400, as well as how to improve a credit score from 400 to 700 in months.
How long does it take to improve a 400 credit score? It’s all about how proactive, consistent, and aggressive you are in improving your score.
7 Action Steps: How To Improve a 400 Credit Score
- Lower Your Credit Utilization
- Dispute Errors On Your Credit Report
- Paydown Debt
- Ask For Credit Increase (Don’t Use it)
- Cut Cards Up Once You Lower the Credit Util (Don’t Close Accounts)
- Mix It Up! (Car Loans, Mortgage, etc.)
- Get A Secured Credit Line
Let’s expound on some of these points and the quickest things you can do to increase your credit score.
Related: 3 Ways To Remove Evictions
Dispute Errors On Your Credit Report
One of the fastest ways to move the needle on improving a 400 credit score is deleting/disputing mistakes on your credit report.
You have to get your credit report and look for mistakes, inaccuracies, and errors. Then, you can write a letter disputing that information, which will get it removed from your report.
This can take a long time but you can hire someone to do this to save time while you are taking action on other steps.
Lower Your Credit Utilization
Because Credit Utilization is a vital factor in your credit score, we are going to focus on tactics that immediately affect Credit Util.
Also, a lot of the factors that influence your CS are affected by your credit to debt ratio.
- Pay down credit card debt to 10%. The popular opinion is having your ratio down to 30 or 20, but we want to be aggressive in making changes.
- Ask someone you trust, with good credit, to be an Authorized User. This will show that you have more credit and lower your credit to debt ratio (on paper).
- Ask For Credit Increase (Don’t Use it). Choose a credit card you are in good standing with, ask them for a credit increase, and do not use it. In fact, cut it up.
Mix It Up! (Car Loans, Mortgage, etc.)
Credit scoring models take into consideration all of your debt, loans, credit lines, and payment history.
Lenders like to see diversity on your credit report, so if you only have credit cars, try getting a secured loan, installment loans, finance company accounts, car loans, etc
How Can A Credit Repair Company Help?
A credit repair company can help you remove negative items from your credit report, advise you on the best course of action, monitor your reports, and write those dispute letters on your behalf.
Here are 3 companies we recommend that provide a free consultation. We suggest you call all three to see what they can offer you and compare fees.
How To Improve A Credit Score From 400 to 700?
Good Luck Moving Forward
We hope this ‘how to improve a 400 credit score’ post helps you reach yours as quickly as possible.
Remember, the longer it takes you to take action, the longer it will take for you to see improvement. You can attack all these action points yourself and hire help so you won’t be alone during the process.
- Make Payments On Time
- Credit A Budget You Can Stick To
- Monitor Your Credit Consistently