Simple Ways To Boost Credit Score
Your credit score is one of the most important factors in your life, as you must have excellent credit if you want to maintain an affordable lifestyle, and you must manage it well if you want to have more options. Are you aware a low credit score not only makes it impossible for you to obtain an affordable car note or loan, but it also prevents you from being hired in many industries? Not all companies issue a credit check while hiring new employees, but many do. Your credit score might seem like just a number, but it carries the power to determine your future. If you’d like to live well, earn a good living, and not waste money on everyday purchases, you must have a good credit score. Here’s how you can boost yours.
Check Credit Report
The easiest and most efficient way to boost your credit score is by checking your credit report. To view credit report scores with the major credit bureaus, you must log on to their websites and opt to check your score free of charge. The United States federal government mandates all major credit bureaus must allow consumers the opportunity to check their credit report free of charge one time every year. The best way to do this is to check your report free of charge every three or four months with a different bureau each time, which allows you to check for mistakes and dispute them. You can boost your credit score in a matter of thirty days or less if you find mistakes on your report. You simply dispute them by filing an online dispute with that bureau and each of the others or write a letter and mail it. The credit bureau will fix the mistake if it’s a blatant one, or they will notify the creditor who made the mistake, giving them the opportunity to fix it or ignore it. If creditors don’t respond within thirty days, the mistake is automatically fixed. You might need to provide documentation, but that’s typically simple.
Continue reading to learn how to make automatic payments work to your advantage.
Set Up Automatic Payments
Boosting your score is simple when you set up automatic payments for your bills. Automatic payments alone won’t boost your score, but having them prevents you from making late payments or missing payments by mistake. With everything going on in your life, it’s easy to overlook paying a bill on occasion because life is overwhelming, and mailed payments could be lost in the mail. In short, there are so many things that might cause your credit score to take a hit.
Automatic payments are transactions you authorize through your creditors each month or even with your bank account every month to remove the same amount of money from your bank account on the same day to make payments to your creditors. Most companies allow this, so you’re able to make your mortgage payment, credit card payments, and more online. You never need to worry you will miss a payment, and this will boost your score by default.
Having A Variety of Credit
If you’ve heard having very little credit is a good idea, you must rethink your way of thinking, as a variety of credit on your report shows you are a good borrower, and it helps you boost your score faster. If you only have a credit card, you’re not doing yourself any favors. This is not to say you must go out and purchase a car if you don’t want to have a payment or you should buy a home, but you should look for different credit types. Take out a personal loan and pay it off quickly before interest begins to accrue. If you are going to finance a car but don’t want to do so for long, do it anyway and pay it off. Having a variety of credit on your report shows you are a responsible borrower and can increase your credit score rather quickly. However, do not go out and apply for a variety of different credit accounts all at the same time, because making too many inquiries in a short amount of time is a negative look.
Continue reading to find out how loyalty can work in your favor.
Stay With the Same Credit Account/Product
Another thing you can do to boost your credit is to stay with the same credit account/product for as long as possible. If you get a credit card when you enter college, keep it even when you no longer use that card or need it. It might be a small store card with a measly credit limit of five hundred dollars, but you should keep that account open, as your credit score is largely determined based on the length of time you’ve had open accounts. If you open a store card in 2001 and start your credit history and don’t open another credit account until 2010, don’t close the old account. If you do, you’re removing nine years of good credit history from your account. Furthermore, closing old accounts lowers your available credit limit, which can increase your debt utilization. It makes the debts you do have appear larger than they are when you lower the available limit you have. You’re not required to use those old accounts, but they can keep your credit score looking more impressive than closing them out can.
Keep reading to learn about increasing your credit limit.
Increase Credit Limit
You don’t want to max out your available credit, but you should increase credit limits when presented with the opportunity. The more available credit you have, the lower your credit utilization score. Your credit score is determined using a variety of factors, one of which is credit utilization.
Let’s say your total available credit is ten thousand dollars and you have one card with a five thousand dollar balance you’re slowly paying off. You are using half of your available credit, which doesn’t look good. It’s favorable to carry no balance, but you should keep any balance you carry below thirty percent if you don’t pay it off. If you have the opportunity to increase your available credit to fifteen thousand dollars, you automatically drop your credit utilization ratio to thirty percent. You’ve just boosted your credit score without doing anything other than accepting a higher credit limit.