5 Ways to Raise Your Credit Score This Year
Having a low credit score can affect many parts of your life. From buying a car to securing a credit card to buying a house, your credit score determines whether a bank will loan you money and at what rate. In many instances, your credit score can also affect where and what housing you can rent.
Luckily, a bad credit score isn’t permanent because there are things you can do to raise that number and keep it there. It may take some time, but you can raise your credit score so you can tackle the goals you have in your life.
Pull Your Credit Report
Whether you’re looking for an education loan to earn a multiple subject teaching credential certification or just looking to lower your rate on a credit card, your first step is to pull your credit report. Before you can fix your credit, you have to know what’s there holding you back.
You can pull your credit once a year from the three main credit reporting companies for free without affecting your score. When you receive your report, look through it for errors. Look for items that are not yours or reports that are not true so you can dispute them.
Also, note line items that are true because those are what’s holding your credit score down. If you are consistently late on payments or you have a default on your credit report, those are easy places to correct your course. Look at the date of those items and find out how long they will stay on your report. For example, defaults stay on your credit report for six years before they fall off.
Pay Your Debts on Time
An easy way to raise your credit score and keep it that way is to pay your debts on time every time. If you make all your payments to creditors on or before the due date, lenders will begin to see you as a trustworthy borrower. Your credit score will increase, and you’ll qualify for better rates on loans.
Pay Down Your Debt
If you have a lot of debt compared to your income and available credit, lenders see you as a lending risk. They can’t see how you will pay back any loan they give you, so if you have high debt, work on paying that down.
You want your debt low, but your available credit high to show that you are a good credit risk.
Increase Your Credit
Another way to increase the gap between your debt and available credit is to increase your credit limits on any credit cards that you have open. So, while you pay off your debt, increase your credit limits to give the appearance that you’ve paid off more debt than you actually have.
Your credit utilization percentage will increase and increase your score because lenders will see you as less of a credit risk.
Get a Boost
One last thing to increase your credit score quickly is to boost your credit through the Experian credit bureau. If you have paid your utility bills on time for the last two years, you can activate a program through Experian to look back at your utility payment history. They will incorporate your on-time payment record into your credit score to give it an instant boost.
Enjoy Better Rates
Increasing your credit score has many benefits from housing and credit cards to loans for your education. If you follow the above tips, you’ll increase your score, keep it there, and open loan opportunities that you would otherwise miss.