Nearly every financial move you’ll make will involve your credit score. From opening up a new credit card and buying a home to applying for a loan or even renting an apartment, a good credit score will make everything easier. Don’t have a great credit score? Here are ways to start boosting it today!
Show You Can Pay
Most importantly, lenders want to see that you pay your bills on time. It makes sense, right? So, you can start improving your credit score by making all your payments on time.
“You want to avoid things like late payments, defaults, repossessions, foreclosures, and third party collections,” says John Ulzheimer, credit expert, formerly of FICO and Equifax. “And filing bankruptcy is a horrible idea. Anything that would indicate non-performance of a liability is going to harm your credit score.”
Meanwhile, once an account is paid off, that doesn’t mean it’s time to close it! “An account that’s paid in full is a good thing; however, closing an account isn’t something that consumers should automatically do in the hopes that it will positively impact their credit score,” says Nancy Bistritz-Balkan, vice president of communications and consumer education at Equifax. “Having an account with a long history and solid track record of paying bills on time, every time, are the types of responsible habits, lenders and creditors look for.”
Keep Credit Utilization In Check
If you have a credit card, or multiple, open, make sure to keep the utilization rate in check. Otherwise, you could find your credit score dropping! What’s the best utilization rate? Somewhere between 5-10% – yes, that low! “In fact, people who have the highest average FICO scores have a utilization of 7%,” Ulzheimer said.
Also, look into if your credit card provider reports directly to the credit bureaus. If it does, you can be sure that credit scoring systems have the most up-to-date information possible.
Opt For Score-Boosting Programs
Thankfully, there are apps for everything nowadays. Even for boosting your credit score fast! There are a lot of score-boosting programs and applications out there, including Experian Boost and UltraFICO. While they don’t elongate the age of your account, they can fill in some of the financial gaps. Experian Boost can easily connect to online banking apps, borrowing some of the critical information to synchronize with the app. Telecommunications and utility payment histories are then added to the report. UltraFICO, on the other hand, asks for permission to see banking data. Later, things like checking and savings accounts are counted in the credit score and financial report.
Last but not least – check out your credit score every month or so using soft inquiry. This step won’t hurt the credit report, and will clearly indicate if the methods are working, showing the right path to success. In case the score is not growing, it’s time to change the tactic.