Updated: Dec 19, 2021
A good credit score comes with a couple of benefits. You can access loan products at lower interests. However, it’s not easy to increase your credit score all over sudden. You will need to evaluate the reason as to why you have a poor rating.
1. Ensure your credit report is clean
Visit AnnualCreditReport.com to get a credit report from the three major credit bureaus:
You have the right to get one annual free report according to the law. Once you request it, either print it or save it on your computer. From there, scrutinize everything, particularly any accounts that either show late clearance or unpaid debts.
The report will guide you on how and where to send a dispute if the information is erroneous. Having a clean credit report is critical for your credit score. Besides, it may have an impact on you when looking for a job since some employers check your credit report before they hire.
2. Settle those balances
In case you have more funds to pay above the minimum monthly payment, you should go ahead. Triggs states that the rate at which your credit score increases depends on how fast the creditors report the settled balance on the consumer’s credit report. Some report a few days after payment, whereas others report at a particular time every month.
What you owe is not crucial, but the ratio of the debt to credit known as the credit utilization rate. It is recommendable to have a credit utilization rate below 30 percent. In case you have a higher rate than that, the quickest way to reduce it is to pay down your debts, which will, in turn, boost the credit score.
You are in a better position if you pay your balance quickly every month. Besides, you can pay multiple times in a month to track your expenditures and maintain a low balance. It assists in settling a portion of the bills, though a major and a faster impact on your credit score comes from paying the balance in full.
3. Pay at least twice a month
You may feel great probably because you make monthly payments. However, creditors report balance once in a month. The credit reporting companies will see as if you are using overusing your credit. The solution is to split your credit card payments. Sending your payments two times or more in a month keeps your balance low.
4. Increase your credit limit
You can increase your credit limit by either request fro it or opening a new card. For a person with a high credit limit, the credit utilization rate is relatively low. That is, provided you don’t max out your card every month. However, make sure you won’t have temptations to spend above what you can afford to pay when requesting fro a credit increase.
5. Open a new account
Your credit utilization rate depends on all the open credit lines and balances. If you realize that your credit card issuer hesitates to increase your credit limit, open an account with a different card issuer. However, note that it is not advisable to open numerous accounts all at once. You might appear extravagant.
6. Avoid closure of the credit cards
If you are keen on boosting your credit score, you need to ensure that your credit cards remain open. Closing of a credit card subjects you to losing the card’s credit limit. It has the potential to reduce your credit score after calculation of the overall credit use. Therefore, let the card remain open to prevent the issuer from closing it.
7. Become an authorized user
Get added on the credit card account of someone else as an authorized user. You can approach a relative or friend with a high credit limit and who is responsible for the use of credit cards. They don’t have to give you the account number or allow you to use their card. The strategy has a significant impact as it reduces your credit utilization and gives you more extended credit history.
Regarding the improvement of your credit score, there is no single solution that will fit perfectly. People have a unique credit journey. There are many factors applicable to most consumers, though they don’t have a similar impact to everyone’s credit scores. However, with the above tips, you have an assurance of rapid improvement in your credit score.