Have low credit score than you’d like? There are many ways to bring it up. You can effectively improve your credit score by as much as 100 points if you’d like in a short time period. Here are a few strategies to try:
Make frequent payments
The most basic thing you can do to curb your credit card balances is to make payments in small segments, called micropayments, throughout a given month and treat the credit card as a debit card. This process is based on a credit factor called credit utilization which in turn gives you a positive score effect. Keeping your utilization low will benefit your score immediately and keeping your balance under 30% is the sweet spot. It is encouraged to pay your credit card balance at the end of each billing cycle.
Get higher credit limits
If the credit limit increases while the balance in your account remains at the same amount, then your credit utilization will decrease. You can do this by contacting the card issuing company and inquiring whether you can get a higher limit without any significant complications. Most banks will approve you for a limit without having to run your credit again, so that is one thing to keep in mind.
“It is encouraged to pay your credit card balance at the end of each billing cycle.”
Credit report errors
There could be a mistake on your credit reports bringing your score down. The three major credit bureaus Equifax, Experian and TransUnion all allow you to get a free credit history report at least once a year. You can go online, request and then check for any discrepancies, misreports or mistakes. For instance, something too old to be listed on the record, or a debt that you do not recognize. After identifying the error, you can move to dispute them and get them removed altogether.
Turn towards authorized usage
If you are a little inexperienced with credits, then it might be suitable for you to ask a relative or a friend with a high credit limit and a decent track record of reliable and responsible credit card history. These account holders don’t need to allow you access to the card’s usage but can add you to their cards as an authorized user. It will lower your credit utilization significantly.
Do not close the cards
Closing credit cards can make it more difficult for you to improve your credit profile and history so always be aware of that. Closing a credit card affects your overall utilization and can result in a decreased score. Keeping it open and using it time and time again will avoid involuntary cancelation. A lot of people close credit cards after they paid them up because they fear they’ll run them up again. This is a bad habit that people have because most of them do not know the consequences of closing down a card. It affects your credit history (length), and your credit utilization percentage. The good thing to do is to keep the card active and use it maybe once a month and pay it in full at the end of the billing cycle.
Stay on time
None of the tips and strategies mentioned above are going to work unless you make payments right on time. It has an extremely significant effect on credit scores because in many cases, late payments can stay on your credit reports for well around seven years. Nonetheless, you might miss a payment or two and rarely ever by 30 days or more so if you do, immediately contact the financial institution and arrange a payment soon.
Mix it up
Consider opting for a credit card you don’t already have if you own only credit cards or loans only. If you want to boost your perceived creditworthiness, you should have both the installment accounts and the revolving credit account.