Whether you are in the market for your first home, planning to replace your old car with a new model or just trying to improve your financial life, it pays to keep your credit score as high as possible. That three-digit credit score impacts your life in countless ways, including some you may not have thought of. From determining how potential lenders view you and your creditworthiness to whether you qualify for a mortgage to whether or not you get the job, your credit score plays a vital role in your life.
If you do not already know your credit score, now is the time to find out what the lenders in your life already know. Checking your credit score is the easy part, but giving your score a boost can be much more of a challenge. Even so, it is possible to raise your credit score quickly, and the tips listed below can help you get started.
Avoid making large purchases that could impact your credit utilization ratio. Lenders look at how much of your available credit you have used, so keep your current balances as low as possible.
Pay off your balances as quickly as possible. Paying down, or paying off, your outstanding balances will reduce your credit utilization ratio even more, so do what you can to retire those balances once and for all.
Leave your old accounts in place. It may be tempting to close old accounts you no longer use, but doing so could actually lower your credit score. The age of your accounts is a factor in determining your score, so leave them in place.
Put your payments on automatic. Using the bill pay feature on your bank account will make paying your credit card bills easier and help you avoid late payments and hits to your credit score. Just make sure you keep enough money in the account to cover the balance due.
Maintain your current payment patterns. Sudden changes to the way you handle credit and pay bills could cause lenders to question your creditworthiness. Avoid sudden changes, like paying less on your balances or missing payments.
Hold off taking on additional debt or opening new credit card accounts. Hard inquiries on your credit file could lower your score, and that is the last thing you want.
Keep your outstanding balances as low as possible. Charging as little as possible will reduce your credit utilization ratio and boost your credit score.
Ask your issuer to raise your credit limit. A higher-credit limit will also lower your credit utilization ratio, which in turn can boost your credit score.
Avoid closing accounts, especially credit cards that you have had for a long time. The age of credit card accounts plays a role in your score, and closing a card could have a negative impact.
Pay off debt. Paying down your debt consistently is one of the best ways to raise your credit score.
Do not open a new credit card account unless you really need it. A large number of inquiries on your account could lower your credit score.
Automate your monthly payments. Missing a single payment deadline could severely impact your credit score, and putting your payments on automatic can reduce the odds of an inadvertent missed payment Review your closing dates and set payment reminder. Know when your credit card accounts close for the month and set a payment reminder to make sure those payments are made on time.
Avoid changes to your payment pattern. A sudden decrease in the amount of your monthly payment could make creditors worry about your financial stability. Keep the same payment pattern, while striving to pay off as much, or more as the month before.
Dispute errors on your credit report. You should be checking your credit report regularly and promptly noting any errors you find. Many credit reports do contain errors that could harm consumers’ credit scores.
Your credit score is one of the most important parts of your financial life, and taking steps to raise it can improve your finances in many different ways. If your credit score is lower than you would like, the fastest ways to increase credit score listed above can help you raise it, so you can get back on track faster than you would have thought possible.