Is your credit score low, and you’re, and you desperately need to know ways to increase it? In this article, we are going to provide you with ways to raise your credit score, which will help you purchase things that you want sooner rather than later.
Continue reading this article for these need to know tips and then sit back and watch your score increase right in front of your eyes.
Ways To Raise Your Credit Score
When you begin to consider raising your credit score, one of the first things you need to understand is how your score is calculated. Knowing how your score is calculated will give you the knowledge to know what things are positively or negatively affecting your score.
There are a few things that are the most important when you take into account your credit score, including:
- The total amount of debt you have
- Your credit history
- Payment history
When you are attempting to purchase a home or a car, you need to take a look at your credit score and everything from the past that may have lowered it.
1. Use Auto-Pay Options
One way that will help to increase your credit score is if you take advantage of the auto-pay option offered when you’re paying your bills. This will ensure that your bills are never paid late and some times paid earlier than the due date.
Having multiple late payments on your credit history shows potential lenders that you’re not reliable when it comes to paying back money loaned to you. This will, in turn, increase the number of rejections you get from lenders, or it will cause them to increase the interest rate that is attached to potential loans you may be seeking.
2. Lean On People That Have Great Payment History
When we say to lean on someone that is known to be on time with payments and has a fantastic payment history, we mean asking them to become an authorized user on their card. This doesn’t mean that you’re able to use their account, it simply means that because they make their payments and are in good standing, it will have a positive effect on your credit score.
As they continue to make payments and use their cards, your score will steadily increase over time. You may also learn some crucial ways to save and manage money from them while you’re at it.
3. Use A Credit Builder Loan
If you find yourself in need of a loan while increasing your credit score, we recommend using a starter loan. The lender will provide you with a loan to pay your bills and other expenses that you may have.
In return, you will make monthly payments to the lender, and as you pay them the money back, your credit score will begin to increase. However, if you don’t make your payments, you may notice that this will also negatively affect your credit score.
4. Don’t Close Credit Cards
You may feel that once you’ve paid off a credit card, you need to close it and forget that you ever opened that line of credit. However, this may not be the best idea for those trying to increase their credit scores.
The reason this idea isn’t entirely beneficial is that by closing the credit card, it increases the amount of credit card utilization that you have with your other card accounts. Fewer cards with the same level of debt owed will not reflect positively and lower your score instead of increasing it the way you would like.
5. Don’t Open New Credit Lines
Any time that you apply for a new credit card, they will submit an inquiry for your credit history. Every time a query is sent, you’ll find that your credit score is lowered in some cases significantly.
When you attempt to open lines of credit frequently, these hard inquires will lower your score. That’s why we recommend opening new lines of credit only when necessary to decrease the number of hard inquiries that hit your credit.
6. Check Your Report For Errors
You must check your credit report from time to time to ensure that everything that’s being reported is something that you’ve done. There are instances when your report will reflect some errors, and if caught, you’ll be able to dispute them.
If you found that the item wasn’t made by you and is an error, it will be removed from your credit report. When discrepancies are removed from your report, you may notice a sudden increase in your credit score.
You must review your credit report regularly to ensure that no errors have been reported within the last month.
7. Pay Your Bills
One of the simplest ways to ensure that your credit score will increase is to pay your bills. They are monthly reoccurrences that can steadily build your credit score.
However, missing one payment can negatively affect everything that you’ve worked hard for. We recommend setting a reminder ahead of your payment date, which reduces the likelihood that you’ll miss a payment.
8. Get A Higher Credit Limit
It’s recommended that you stay below 30% utilization rate when it comes to using your credit cards. One way of staying below this rate is to ask the credit card company to increase the credit limit that has been provided for your credit card.
Your limit will increase, but the times that you use your card will either remain the same or decrease. If this is an option for you, then you need to contact your credit card company.
But, let them know you’d like a credit increase that doesn’t involve a credit inquiry.
Time To Improve Your Credit Score
All of the methods we listed above will be beneficial when you think of ways to increase your credit score. Increasing your credit score is about managing the way that you use your finances.
If you’d like to read more tips or get some personal help with your credit score, contact us, and let us put our expertise to work for you.