11 Moves to Raise Your Credit Score

The very first step in improving your credit score starts with checking your credit history. This will give you a clear idea of what you are dealing with. You can pull your credit history with each of the three major national credit bureaus i.e. TransUnion, Equifax, and Experian, and review them to know what's hurting your credit score.

Once you've got an idea of factors affecting your credit score then you can plan accordingly to act on it. Higher credit scores are influenced by on-time payments, a mix of different credit cards, low balances on your credit card and loan accounts, older credit accounts, and minimal inquiries for new credit. 

Avoiding late payments is a very simple technique to improve your credit score. Make sure you are making payments on your outstanding debts on time. You can stay on top of your payments by creating a filing system to keep track of your monthly bills. 

Another way to do it is that you can set alerts on your phone or in emails to remind you exactly when your payment is due. You can also consider a stress-free approach of automating bill payments from your accounts to make sure that they are paid on time and consistently.

Using 30% or less of your available credit is known as the credit utilization ratio which is a big factor in your credit score. The easiest way to keep your credit utilization in check is by paying your credit card due in full each month.

If that is not possible each month then the next best thing is to keep your total outstanding balance at 30% or less of your total credit limit. Now, you can work on cutting that down to 10% or less, which is a good way to raise your credit score. You can also ask for a credit limit increase as long as your balance doesn’t increase.

Raising your credit limit on a credit card is another way to lower your utilization score. When the credit limit rises then utilization rate automatically drops down. But one thing to understand is that raising the credit limit only works when you can avoid the temptation of overspending.

It can also backfire sometimes depending on your credit situation while raising your credit limit because if you are denied to do so then your credit score will take a hit. Therefore before requesting it make sure you have been consistent with your debt payments and have a healthy credit score.

Once you get a new credit card it will increase your credit score because of your new credit line. This is because it decreases your credit utilization score as a result of an increase in your credit limit. 

For example, if you have to pay $10,000 and have a $20,000 credit limit then you get a 50% utilization ratio. Adding a new card with a $20,000 limit increases your overall credit limit to $40,000 and reduces your utilization ratio to 25%. You should keep the ratio, which is responsible for 30% of your credit score, below 30%.

Applying for a new card will also unlock many other benefits. New credit cards often offer a welcome bonus, intro APR offers, and other perks to attract new customers.

When a credit report shows delinquencies it refers to missed payments or falling behind on monthly payments to credit card companies. Due to this, it is important to resolve delinquent accounts or any other accounts that have been flagged by collection companies no matter how long that happened.

If you have such accounts where you've missed payments then make a strategy to make future payments always on time. Although it won't erase past defaults, it can improve your payment history which will help in improving your credit score.

Note: Any negative account information can remain on your credit history for up to seven years and bankruptcies for 10 years.

Debt consolidation means taking out a single, new loan to pay off all the multiple existing debts. It is the same as gathering all your smaller debts into one bigger bucket. Then you are only required to deal with one payment and also if you can get it at a lower rate you will be in a good position to pay it faster.

Likewise, a similar step would be to consolidate different credit card balances by paying them off with a balance transfer credit card that offers a zero percent interest rate for a specified time. Such cards usually have a promotional period when they charge no interest on a balance. But keep in mind that balance transfer fees can cost as much as 5% of the amount of a balance transfer.

Age of credit (how long you’ve had your credit accounts) is also a factor that many lenders use to evaluate a borrower. The older your average credit age the better. Even though you have an old credit account but not using it, still don't close it. 

If you have an old credit card or other loan that has been already paid and is sitting at zero interest, just let it continue to reside on your credit report. This will help you in the long run as it will offset any other outstanding credit balances you owe and keeping dormant credit accounts open is beneficial.

Most credit card companies allow their cardholders to add authorized users to their accounts without charging anything. When you are added as an authorized user to a card that has a positive payment history, has been open for a while, and has credit utilization on that card then it will help increase your credit score.

But remember an authorized user is not an owner of the account, they can use the card to make purchases but are not legally responsible for making payments. Normally Most banks do not do a hard credit pull before adding an authorized user. However, be careful whose credit card you are added to. If it’s a card with a record of late payments then being added to it can negatively impact your credit score.

This might happen just by asking it nicely. For example, you have a few late payments on your record due to some unfortunate circumstances. You can just request your lender to delete them from your record just by asking nicely and they have the access to do it. If you are a good long-term customer then it will work.

All you need to do is simply call your lender and request them for a goodwill deletion and make sure to speak to someone in charge remaining friendly and polite during the conversation. Remember they don't have to do this so keep your hopes to a minimum so you don't get disheartened if they deny your request.

If you are someone who moves a lot then establishing a P.O. box is a good idea because regularly changing phone numbers, addresses, and employers also leads to keeping your credit score lower than it should be. If you can provide a P.O. box number and a stable phone number they will never change.

P.O. box might charge you extra monthly but the bigger picture is that it could potentially save you tens of thousands of dollars down the line. If you have a stable address and contact number your credit score will be in a better condition and at the time of borrowing this will help get you reduced interest rates.

A good credit score is incredibly important in today's economy no matter what sector you are involved in. Credit score not only affects your potential to get a loan or the interest rate you are going to pay but also affects your job applications, insurance rate, etc. Here are some great benefits of having a good credit score listed.

• Firstly and most importantly it will help you get approved for cred or borrowing. Most loan programs have minimum credit scores to qualify.
• A good credit score will assist you qualify for lower interest rates and fees. This is because having a good score will make lenders see you at no risk of loan default.
• Landlords, utilities, cell phone companies, and other providers may not ask for larger security deposits once you have a good credit score when doing business with you.
• Renting a home will be an easy job because landlords usually select tenants with higher credit scores because they are seen as the ones who pay their dues on time.
• You will also be charged less on your insurance premium. This covers various types of insurance such as auto, life, homeowners, renters, etc.
• Another where you'll stand out with a good credit score is on your job application because some job categories or professional licenses need you to maintain good credit.

No fixed number of days or points will help you increase your credit score every month and also there is no set number of points that each action will gain. How long it takes to boost your credit depends on the details of why your credit score is low.

If the major negative on your credit score is credit utilization then paying off your due, will drastically improve your score in a single month. If your credit is low because of a history of poor payment on multiple occasions then it will take a longer period of on-time payments to see any improvement.

Content Sources:

• Wikipedia
• my Fico
• Experian