Is your current credit score less than desirable? Increasing your credit score seems daunting, but there are easy ways to increase that ‘all important’ number… and fast!
Here are 7 PROVEN ways to improve your credit score.
Know Your Score
Your first action item is simple: Find out where you currently stand.
How are you supposed to know how to improve your score if you don’t even know what it is!?
Credit Sesame is a trusted site for checking your credit score.
Monitoring your credit score is a great way to see exactly what is being reported to the credit bureaus. Errors on your credit history can greatly affect what your score is.
These errors need to be addressed immediately. This ensures that you’re not a victim of identity theft or a financial crime. Even if the entry itself is accurate, doesn’t mean the details about the entry are accurate.
Send a physical letter asking for proof. You will send this letter to the credit agencies asking them to correct the inaccuracies or remove the entry.
The best way to have them removed it to send a physical letter asking for proof that this is your outstanding debt. If they fail to provide proof within 30 days, the credit bureaus are required to remove the negative items from your credit score. Which in return will increase your credit score.
Your Mortgage Can Increase Your Score
An easy way to increase your credit score is to have your mortgage be reported on your credit report. (Assuming of course that you make on time payments). Mortgage lenders are not required to report to all 3 credit bureaus per the Fair Credit Reporting Act (FCRA) and you cannot submit your own account info to be added.
What you CAN do is reach out to your mortgage company and request that they report your account to Experian. You can ask about the steps needed to ensure the account is appearing on your credit report
Keep Utilization LOW
Credit utilization is important to your credit health. Credit Utilization is the percentage of your credit limit are you using.
Credit utilization equates to 30% of your credit score. The more you are using your credit, the lower your credit score. This is an area of your credit report that is high impact, so a good rule of thumb is to keep your utilization under 10%.
How much of your total credit you are using?
Let’s break this down in an example:
Your pretend credit limit is $5,000
If you use 10% of your credit, you will have a balance of $500.
Once your balance hits $450, pay it off immediately to keep your credit utilization under 10%.
Another helpful tip to keep your utilization low is to treat your credit card like a debit card simply and pay it off after each purchase.
It is a MYTH that you need to carry a balance and pay interest on your card to increase your credit score.
Request Higher Limits
Call your credit card companies and request a higher limit.
Sometimes they will have to pull a “hard” credit inquiry, which will temporarily drop your credit score a couple points. Don’t worry – it will go back up over time.
It is ideal if they are able to give you a credit limit increase without a “hard” credit inquiry.
When you credit limit increases it automatically lowers your overall credit utilization.
I was able to increase my Amazon Credit Card limit from $1,000 to $7,500 in a matter of 2 minutes online.
Become An Authorized User
Hear me out on this one.
I do not believe in co-signing loans or borrowing money from people, especially as an adult.
Unfortunately, borrowing money or co-signing loans puts a strain on relationships, especially when your loved one is not responsible with their money.
Becoming an Authorized User is different.
Find someone that is GOOD with their money, has good credit, and always makes on time payments.
Have them add you as an AUTHORIZED user but DO NOT TAKE THE CARD.
Do not even entertain the idea of adding new purchases to their account. Just reap the benefits of having this credit line being reported for you.
Disclaimer: If the owner of the accounts makes a money mistake, like not paying the bill on time, it will also reflect on your report and you are also responsible for the money owed. So be VERY careful when considering this option.
Negotiate Outstanding Balances
Bills in collections wreak havoc on your credit score.
Sift through your credit report, save up a lump sum of money and pay off those past due balances.
If the bill is $5,000 and you can pay $4,500 today, negotiate.
Always get the negotiated terms in writing before you make the payment that will close the account.
Medical bills are the easiest to negotiate.
Get those past due bills OFF your credit report and you will see your score increase!
Pay Down Your Balances
If you have past due cards and are only paying the minimum, stop using them until you have paid them off.
Check out the two best ways to pay off credit cards using the debt snowball or debt avalanche.
Credit Cards are a tricky business. Just like any other tool, mastering how to leverage it to benefit you is key to being involved with them at all. Have you used any of these tactics to increase your credit score? Let me know!
Again, if you would like you check your credit score for free, click here!
Ways I save money:
Here at Freedom In A Budget, I am all about saving money! Here are some of the EASY ways that I save money:
• Fetch Rewards is a free grocery savings app that rewards you just for snapping pictures of your receipts. That’s it. Really. Free gift cards on groceries on thousands of products every day, no matter where you get your groceries.
Just scan your receipts and get gift cards from retailers like Amazon, Target, Ulta, Applebees. Use code QHKBH to earn 2,000 points ($2)!
• Credit Sesame offers Credit Score and Monitoring, Savings Recommendations and Identity Theft Protection. ALL FOR FREE.
• CIT Bank offers high yield savings accounts and CDs to provide a safe, secure way to grow your savings. With the CIT Bank No-Penalty CD, you get the security of an 11 month CD with no withdrawal penalty seven days or later after funds have been received.
• Gabi is a full-service, online advisor who compares all your insurance options to find you the right policy, all in under two minutes.
• M1 Finance is an easy to use brokerage platform that allows you to invest in Fractional Shares and auto reinvest!
• Webull Get 2 Free Stocks on WeBull when you deposit $100 (Valued up to $1400).
• Billshark negotiates lower prices on your monthly bills to save you time, money and hassle.
• Glasses USA Save money by buying your prescription glasses, contacts or prescription sunglasses online. They have an easy to use virtual mirror so you can see what they look like on and carry tons of name brands up to 65% off your first pair.
Some of the links in this article are "affiliate links", a link with a special tracking code. This means if you click on an affiliate link and purchase the item, we will receive an affiliate commission. The price of the item is the same whether it is an affiliate link or not. Regardless, we only recommend products or services we believe will add value to our readers. By using the affiliate links, you are helping support our Website, and we genuinely appreciate your support.