How to quickly boost your credit score
Your credit is one of those things you probably don’t really consider while going about your everyday life. Until, that is, you want to make a big purchase only to find out your magic number isn’t magical enough to get you the lowest interest rate.
Then, you want to fix it. And fast.
So, what are some ways of bumping that number up that won’t take an eternity? Some of these work faster than others, but all of them are worth doing pronto.
Don’t use too much credit at any given time
It’s called credit utilization. This number is the ratio of debt you’re carrying versus how much credit you have available. Basically, for those math-challenged among us, creditors look at this number to determine whether your debt tank is all filled up. If, for example, your credit limit is $5,000 and you have a balance of $4,800 on said card, your credit score will be negatively affected because you’re considered to be using too much of your credit.
According to personal finance website NerdWallet, it’s smart to “use less than 30% of your limit on any card, and lower is better. The highest scorers use less than 7%.” So if your credit limit is $10,000, that means you get a whopping $700 to charge every month.
Just because you have it doesn’t mean you should use it.
Related Tip: A quick and easy way to affect your utilization number (besides paying off your balance) is to call your creditors and ask for a higher limit. This works quickly because once the credit card vendor passes this information to the credit bureaus, your score will improve. Credit utilization goes down; score goes up!
If you missed a payment, pay that. NOW.
Missed a due date by a few days? This is not a time when you should let bygones be bygones, because your creditor certainly won’t. If you pay immediately, you’ll still be charged the late fee, but your account won’t be marked delinquent. If your payment is more than 30 days late, however, the account will be marked delinquent and show up as a big ol’ negative on your credit report. In fact, every month the account remains in default will continue to hurt your score.
To start repairing the damage, pay the bill. If the payment was really late, call the company, let them know you have paid and ask if they’ll stop reporting the late payment.
Most importantly: Moving forward, make it your mission to pay your bills on time. This is the number one factor in maintaining good credit. Thankfully, this can be a no-brainer! Many credit cards make it easy to set up online payments, so that you’re at least paying the minimum (if not the full outstanding balance) every month.
Related Tip: If you miss a payment by a few days and are otherwise on time, consider calling the credit card company and asking them to remove the late fee. Many will do a one-time removal and others will remove it for loyal customers. Most fees are $25 and up, so it’s worth a brief call!
Phone a friend
Or a family member. It does need to be someone who likes and trusts you, though. If you have some of those folks in your life, consider asking one of them to make you an authorized user on their credit card. Before you get giddy at the thought of spending someone else’s money (kidding—we know you’re a responsible person), let’s dig a little deeper.
By adding you as an authorized user on their card, this angel from heaven will be sharing their good credit history with you and boosting yours in the process. To set their mind at ease, the card holder doesn’t need to ever give you the card, let you use it or even give you the number. Simply having your name associated with their card will help.
Pretty nifty, isn’t it?
Mix it up
Do you have a loan, but no credit card? Or maybe you have one loan and pay everything else with cash or check, eschewing credit altogether. Well, it’s time to dip your toes into the wide world of borrowing money. But only a little bit, OK? Don’t go crazy with the plastic.
A little variety in your credit history shows creditors you know how to manage and pay multiple accounts. It can also help lower your credit utilization number, since another type of creditor means more available credit. (Remember, we’re not spending that extra. It’s there to remain available!) Both of these factors ultimately lead to a higher credit score.
You’re probably figuring out that having good credit isn’t all that complicated. It’s basically a matter of conscientious spending (sometimes easier said than done, we know) and paying your bills on time. A little self-discipline and a lot of calendar reminders, and you’ll be all set. Now go on out there and raise those credit scores!