5 Surprising Ways To Boost Your Credit Score
In 2020, the average American had a credit score of 711, according to Experian.
The FICO model of credit scoring divides scores into five categories:
Very poor: 300-579
Very good: 740-799
711 isn’t a terrible score, but when it comes to purchasing a car or home, the higher your credit score is, the more opportunity you have.
But how can you increase your credit score? In this post, we will share with you a few ways you can increase your score that you may have never previously thought about.
Need help with your credit score? Contact PVS Financial Coaching Solutions today!
Report Less Common Debts
Perhaps you don’t have any credit cards or loan history that you can use to work on your credit score – some companies actually allow you to report rent payments or phone bills on your credit report.
According to Dave, your credit score can increase by 28 points in two months, on average!
Fact Check Your Credit Report
Everyone makes mistakes – even the credit bureau! That is why it is so important to monitor your credit report for accuracy regularly (however, keep in mind that you do not want to check your reports too much – this can negatively impact your score).
You can order a free copy of your credit report from Equifax, TransUnion, and Experian each year. Once you access your reports, you can start reviewing the information.
Search for things like incorrectly reported credit limits, debts that were paid that have been marked as unpaid, and even accounts that aren’t yours. Once you have found these errors, make a note of each one and file your dispute. You wouldn’t believe how this small amount of effort can help raise your score!
No New Lines Of Credit
As we stated earlier, you don’t want to check your credit score too frequently, and you also don’t want to open up new lines of credit too often.
Whenever you apply for a new credit card or loan, the company submits an inquiry on your credit history. Each time you apply for a credit line and an inquiry is sent, your credit score suffers and is lowered. Be sure only to open up a new line of credit when absolutely necessary.
Ask for a Credit Limit Increase
Sounds crazy, right?
Of course, you want to pay off your credit card or loan balance(s) as quickly as possible, but another smart way to boost your credit score is to call your credit card company and ask for a credit line increase.
How does this work? Your credit utilization ratio (or rate) is the amount of credit you’ve used divided by the amount of credit you actually have available to you. For example, if your credit limit is $1,500 and you’ve used $200, your credit utilization ratio is low, and you look stable to creditors. However, if you’ve used $1,000 on that same credit limit, your ratio is higher, and you appear riskier. When you ask for this increase, be sure to ask if the increase involves a credit inquiry.
Pay By Your Credit Report Date (If Possible)
It’s always a good idea to pay your bills on time, if not earlier, but another sneaky way to make your debtors happy and raise your credit score is to pay your bills before balances are reported to the credit bureau. For example, if your bill is due on the 15th of the month, but the credit card company sends out a report on the 12th, try to make sure that you can pay your bill before the 12th of the month.
Finding out the date your company reports your credit history is as simple as contacting your creditor and asking. That easy!
Don’t have time to monitor your credit? No problem – PVS Financial Coaching Solutions can do the work for you. Contact us now!
Building credit may seem daunting at first, but it doesn’t have to be complicated! Just keep the tips we mentioned above in mind, and you will be sure to have the credit score you’ve been dreaming of in no time! And with a great score comes the freedom to elevate your life in ways you were never able to before! Good luck!