Credit scores are vital for financial wellness, but getting and keeping a high score can be tricky. There is no quick and easy way to dramatically boost your score over a short amount of time, but you can take steps to increase your credit score gradually. Here are six ways to help you boost your credit score starting today.
Your payment history is the most important factor in determining your score. A missed credit card payment can significantly impact your score, and it can take months to recover the loss. Set a regular reminder for a few days before your bill is due to ensure you never miss a payment.
Your credit utilization ratio refers to the amount of available credit you use. It’s best to keep your utilization under 30%, or even 10%, if you can. It can also be a good idea to accept offers of increased credit or to request an increase on your own, which can instantly bring down your credit utilization ratio.
You need to use your cards to keep your score high. A great way to make sure you use your cards on occasion but don’t overspend is to charge fixed expenses, like monthly subscriptions, to your card. Just be sure to pay the balance in full before the credit card bill is due.
Pay down your bill by trimming an expense category in your budget and channeling that extra money toward your credit card bill. You can also reach out to your credit card company to ask for a lower interest rate. Finally, consider consolidating credit card debt with a personal loan from Elevate Credit Union.
A fraudulent charge on your credit card can bring down your score without your knowledge. Check your statements each month for possible signs of fraud. Contact the credit card issuer immediately and dispute it if you see anything suspicious.
Becoming an authorized user on another cardholder’s account can be a great way to get quick results. Team up with someone with excellent credit and never misses a payment; your partner’s responsibility will reflect well on you.
Did we miss anything? Let us know how you have increased your credit score in the comments below. And if you liked this post, be sure to check out the rest of our MoneySmart Tips Blog.