The good news is that you can use these tips to raise your credit score, and you don’t have to pay someone to do it for you.
You probably know the importance of your credit score and all the life complications that can arise from a low score. Credit card denials, high down payments, and unrealistic interest rates, anyone?
You can repair your credit score, and you don’t have to pay someone to do it for you. If you’re willing to dedicate a little time to the task and are ready to adjust your financial habits and perhaps make a few sacrifices, you can see your score rebound relatively quickly.
How do you do it? We have eight actionable tips that will help you boost your score while embracing a new financial strategy that sets you up for future success.
1. Hold yourself accountable to a strict budget. Use these tips to raise your credit score.
The money you spend every day impacts your credit report, which can affect your credit score. If you’re functioning without a budget, you’re likely sabotaging your credit score without even realizing it’s happening.
Think about the lunches, lattes, and shopping sprees that you put on your credit cards. Those cards may seem like an extension of your pay, but your credit score decreases as your balances climb higher. If you aren’t paying them off completely every month, you’re carrying a balance and lowering your score.
When you follow a budget, using these tips to raise your credit score, you get to decide what and how you spend your money. You can prioritize expenses that lower your credit score, including:
2. Allow your on-time utility payments to work in your favor.
Experian Boost is a program that allows you to boost your credit score by paying your utility bills on time. Utility bills don’t appear on your credit report naturally unless you allow them to go into collections, and then a collection agency adds them as debt. Boost allows you to add your utility bills in good standing to your credit report, instantly boosting your score.
Tips to raise your credit score! What’s the catch? There are a few, but they aren’t necessarily bad:
Tips to raise your credit score, you may benefit the most from Experian Boost if you have a thin credit report, which means you don’t have many active accounts reporting on-time payments. Once that instant boost is delivered, you still need to maintain a higher credit score by making great financial decisions.
3. Make auto payments biweekly instead of monthly.
This strategy is simple. Split your monthly car payment in half and pay that amount every two weeks rather than making one full payment each month. Due to the extra week that falls into some months, you will end up making an additional car payment every year.
This system works well if you get paid biweekly and pay half your car payment from every paycheck.
4. Take advantage of automatic payments.
Using these tips to raise your credit score, learn why lenders allow you to set up automatic bank drafts for a reason: They’re more likely to get paid on time each month. That’s the exact reason you should make use of auto-pay: You’re more likely to make your payments on time every month.
Payment history is the factor that holds the most weight when your credit score is calculated. Setting up auto-pay ensures you never forget to make the payment regardless of what else is happening in your life.
5. Request higher credit card limits.
Have you been paying your credit card bills on time for at least a year or two? Contact those lenders and request a higher credit limit. You may also want to ask that they don’t hit your credit with a hard inquiry because that may temporarily lower your credit score slightly. Many lenders will extend your credit based on past payment history alone, and others will agree to perform only a soft inquiry on your credit report.
You’re not increasing your credit limit so that you can charge your card higher. The higher limit will create more available credit on your report, lowering your credit utilization ratio and credit score.
6. Use these tips to raise your credit scores. Secure a new loan to mix up the type of credit reflected on your report.
Did we suggest you take out a new loan? Maybe, or maybe not. This is a strategy that only works if two qualifications apply to you:
Your score is impacted slightly by the mix of credit account types. Preferably, you will have credit cards and various types of loans to show that you can handle multiple financial terms responsibly. If you don’t have a good mix, maybe it is time to go for a new car loan. Perhaps you need to add a credit card if you only have loans right now.
7. Use short-term loans to your advantage.
This strategy extends from the previous tip, so make sure you meet the qualifications listed there before using this strategy.
Short-term loans are often referred to as “payday loans,” They don’t always have an excellent reputation. Some lenders take advantage of consumers desperate to secure cash and charge extremely high-interest rates, but that isn’t always the case.
You can find short-term loans with more reasonable terms and report to the credit bureaus. If you need to add more positive credit activity to your credit report to boost your score, you can take out a small loan and pay it back on time. The timely payment will give your credit score the boost you need, and the loan may provide a more diverse mix of credit types for an added benefit.
Of course, this strategy only works if you can afford to pay the loan back in full and on time, and it’s a last-ditch effort that you should only use if you need to see a quick increase in your score.
8. Have someone you trust add you as an authorized user on their credit cards.
You don’t always have to apply for a new credit card to add credit to your report. When someone else adds you as an authorized user on their credit card, a card is issued to that account in your name. The lender will start reporting to your credit report and the primary cardholder’s report.
This only gives you a credit score boost if the credit card you’re added to is in good standing and the primary user makes on-time payments every month. If they have a habit of charging the card up to the limit or beyond, it could hurt them. Only do this if you know that the person helping you out is financially responsible.
If your credit score is extremely low, it may feel impossible to raise it even with these - tips to raise your credit score. While we enjoy enabling consumers to repair their credit independently, we know that sometimes a little help is needed. You’re never alone.