Tips & Tricks on How To Improve Your Credit Score
Your credit score is an important factor in numerous areas of your life. In addition to being the basis for almost all credit decisions, it may also be used by landlords, employers, and service providers such as cable companies and cell phone companies. Fortunately, there are some tips and tricks on how to improve your credit score.
The most important credit repair tips and tricks is to pay everything on time, every time. The most important part of your credit score is your payment history. Every on-time payment improves the most important part of your credit score. However, every missed payment does damage, so pay the minimums on everything first.
The second most important credit repair tips and tricks is to start the clock right away. Some people don’t need credit for their daily life. While that is great, creditors don’t care about your finances that don’t include loans. If you are young, or if you have made it this far without credit, get some right away. The trick is that you need good credit to get good credit. The way out of this nasty credit score trick is to find a way to get some small amount of credit and build on it. A secure credit card, for example, will provide you with credit in exchange for a deposit. You benefit from having a credit card, they are protected from a loss by holding on to your cash. It’s a win-win. An important tip is to make sure and use the card that way you can make an on-time payment.
Another trick how to improve your credit score is to pay down balances on revolving credit accounts like credit cards or home equity lines before fixed loans like mortgages and auto loans. Unlike mortgages or auto loans, revolving credit accounts count toward your overall credit utilization. The less of your overall available credit you use, the better, so send extra money to your Visa before paying extra on your mortgage.
Your credit score is calculated directly from your credit report. Unfortunately, mistakes are not uncommon on credit reports. Use your legally required free credit report to find any mistakes and get them removed. This process can take a long time, so don’t wait until you need to apply for credit. Start now, and get those mistakes cleared before you need to apply for new credit.
Try Experian Boost. It sounds crazy, but for some people, it works. The boost comes from including other types of credit that usually are not reported on your credit report. Accounts like phone bills and rent payments may contain a long, positive history for some people. Including those accounts can boost your score by several points. Just remember, Experian Boost only works on credit scores calculated from your Experian credit report, so it won’t work with every lender.
An important credit repair tip and trick on how to improve your credit score for people with a long, positive credit history is to keep your oldest accounts open. It seems counterintuitive, but do not close old accounts, even if you don’t use them anymore. Length of credit history is another important factor in your overall credit score. Your oldest accounts boost your score by several points, so don’t close that account you used to buy a guitar with back in 2007. An important credit score trick is to use your oldest account every once in and while. Otherwise, the creditor might close it as inactive without notifying you, hurting your credit even though you did nothing wrong.
A less well-known credit repair tip and trick is to diversify the types of accounts you have. Your credit mix affects your credit score. A wider array of credit accounts adds up to a higher credit score. If the only debt you’ve ever had is that one credit card you got in college, you can improve your score by adding another kind of accounts such as a car loan or a mortgage. Just remember the most important factor in your credit report is on-time payment history. Don’t add another account if you can’t pay it on time along with all your other accounts.
Don’t open new store accounts just to get a discount. The cashiers make it sound so tempting. Open up a new account with us and get 20 percent, or even 30 percent off of your purchase. You can apply and get a decision immediately. It sounds too good to be true, and when it comes to your credit report it is. Your credit report factors in how many times your credit gets pulled to make a lending decision. Every time you apply for a store card your credit report shows another inquiry on your credit report. More than a few credit inquiries and your score starts to decline.
Likewise, lenders see opening too many accounts too quickly as an issue. Only open accounts you really need, and only when it is planned out financially in advance. Don’t open accounts on the spur of the moment like at the checkout.
Use your points to pay down your credit card balance. If you have racked up a lot of points and don’t need them right now, using them the right way might improve your credit report. You still have to make your minimum payment in cash, but many credit cards offer the ability to use your mileage or points to pay down or erase, purchases on your credit card. This lowers your overall credit utilization and boosts your score.
Forget about the due date and start paying attention to the statement closing date. Many credit card lenders report the balance on your account based on the balance when they generate your statement. Paying before that date ensures that a lower balance gets reported to your credit report. A lower balance means a lower credit utilization and a higher score. This trick is especially important for people who use a credit card consistently but pay it off every month. Just four or five days can really improve your score.
If you need a higher score fast, the best way how to improve your credit score is to pay down your existing credit balances. Consider using your savings or other cash to pay down your credit balances before applying for large loans like auto loans or a mortgage. Qualifying for a lower interest rate on larger loans will save you far more money than earning less than one percent in a savings account.
If you have parents or other relatives with good credit, there is a credit repair tip & trick to boost your credit score by piggybacking onto their credit. Have them add you as an authorized user to one of their oldest accounts with the best payment history. In time, most creditors will report the account on your credit report as well giving you both a longer credit history, and a plethora of on-time payments. Beware, as this credit score trick may take several months to help. Lenders are in no rush to report new authorized users. Expect it to take two or three billing cycles before it shows up on your credit. Also, be sure that the person you attach to can be trusted to always make on-time payments, or their bad payment history will become your bad payment history, too.
You may be able to repair the damage certain kinds of credit are doing to your credit score with a phone call. Some creditors, especially medical debt, may be willing to accept payment in exchange for deleting the debt from your credit report. Many times, they will accept a reduced payment as well. After all, getting 40 percent from you is better than getting five percent selling your debt to a collection agency. Be sure to get the agreement in writing and then make the payment right away. Don’t feel weird about asking. You aren’t the first and you won’t be the last. If you can’t pay all the debt, call anyway, and explain that you will pay them, you just can’t right now. They may accept a small goodwill payment in exchange for starting to report your account on on-time.
A fast, free trick on how to improve your credit score is to ask for an increase in your credit limit. A higher maximum credit limit lowers your credit utilization without you spending a dime. Many credit card lenders will automatically increase your limit if you have a good history with them. All you have to do is ask. For bigger credit card companies like Capital One and Chase, you don’t even have to talk to a real person. Just log in to your account and find the button to ask for a credit limit increase on their website. The rest of this trick is to not use the higher limit. That will just lower your credit and increase your minimum payment.