Your credit score serves as your lifeline in the financial world. Take care of it and you will get to receive plenty of benefits – leave for granted, and the number of things you can do or qualify for can be very limited. This is the reason why having a high credit score, and knowing how to boost your credit score fast, is an absolute must for all cardholders.
However, getting it to a higher level can be a quite tricky especially if you do not have many transactions or if you already adversely affected your score through non-payment, overspending, or a combination of the two. Fear not – there are many other ways there to turn your financial situation around you.
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If you need help when it comes to improving your credit score and maintaining your credit card’s good standing then don’t worry because we can help you with that.
Below are some of the most effective ways to quickly boost your credit score. But before we start, here’s a quick reminder of what a credit score is.
What is a Credit Score?
A credit score is a 3-digit number (ranges from 350-800) that lenders use to assess a borrower’s ability to pay back a loan. It’s essentially a point-system that reflects your ability and willingness to settle your debt. The higher the credit score the better for it shows the loan companies that you’re not going to be a headache-inducing borrower and that you can pay what the money you owe them in time.
Get it? Well then, here are the five classifications of credit score.
Poor: 300 – 579
Fair: 580 – 669
Good: 670 – 739
Very Good: 740 – 799
Excellent: 800 – 850
After giving you a quick refresher of what a credit score is, here are some of the most effective ways to quickly improve your credit score.
Pay Your Bills on Time
Your credit card score will never improve if you don’t know how to pay your bills on time. Why? It’s because that directly affects your payment history, which is one of the first things that lenders will look into so they could identify your paying pattern. Incomplete and late payments can cause negative marks on your credit score with the latter lasting for up to 7 years.
To boost your credit score, you need to pay all of your bills on time. This includes not just your loans and card dues but also utilities and even your phone plan.
What if you have a lot of pending past payments and you don’t have enough money to settle them all at once? Then just try your best to keep them as current as possible. Your main goal here is to have a payment history that shows you being proactive at paying your bills. This will also help you have better financial habits.
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Increase Your Credit Card Limit
Asking for an increase in your credit limit while keeping your card’s balance the same can improve your credit utilization rate which can then lead to a boost in your credit score. To do this, you need to reach out to your card provider and ask if they could increase your card’s credit limit.
You‘ll have a better chance at this if you have a steady job and you’ve been a cardholder for a long time now. Often times lenders are willing to work with you on this front so long as you also have been paying your credit card timely for many years.
Pay Your Card’s Balance Frequently
If you have a huge card balance that you just can’t pay off in one sum then cutting it down by paying a couple of times per month can be a good idea. Making small payments whenever you can not just only lower your card balance but also keep your overall credit utilization ratio in check.
You don’t even have to wait for your due date to arrive, just make payments whenever you have some extra money and you’ll see the good effects it’ll have on your score.
Protip: when trying to pay down your credit card balance, be sure to communicate with your credit card company. While it can seem scary, making a call and requesting information can be an important first step to actually getting your card paid down in a timely manner.
This is because they can provide you information on how to best pay down your credit card balance and will often times work with you if they are seeing you make the effort to honor your debt.
They can also give you the dollar amount needed to pay your credit card down without incurring more interest. Over-communication is key!
Dispute Any Credit Error You See
Think you’re being a great cardholder but for some reason, your score is showing the exact opposite? Then you might need to check your credit card report to see if there’s any mistake. In case you didn’t know, you are entitled to three free annual card reports issued by TransUnion, Equifax, and Experian (You can visit AnnualCreditReport.com for that).
Check every entry and make sure that they are not just accurate but also should be included in the report. Once you see any discrepancy, don’t hesitate to contact the bureau where you got your report from and have them correct it.
Avoid Closing Credit Cards To Boost Your Credit Score
While it may seem that closing credit cards you barely use can improve your credit score, it is actually not a smart move.
Credit cards, especially those with lifetime waived annual fees, can help balance out your credit utilization rate. You’ll do better by using them from time to time so the card issuer company won’t think they are inactive and close them.
Protip: I personally have 10+ credit cards, which I rotate out on a frequent basis. This is because I find that this strategy helps me on two fronts:
- I maintain my credit utilization rate at lower levels.
- I continue getting rewards from the companies as they incentivize me to come back and use their cards. It’s a win-win for both of us!
Settle Past Unpaid Balances
Another effective way to boost your credit score and credit utilization ratio are by settling your bills that are due, including those that have been around for a long time.
If you have those then your payment history is already damaged, but you can still turn things around by paying them in full. And once you do, you can ask your loan company to update your account so that it can improve your payment history.
Open a New Credit Card Only When You Need To
Applying for new credit cards while you’re trying to improve your financial lifeline is not recommended for while it could increase your credit limit, it also produces more hard inquiries that can damage your credit score in the long run.
The key is to limit the amount of inquiries to a reasonable level, especially when you are in a time period of looking to make a major purchase.
Once you can reach your goal, then that’s when you can open more accounts.
Use Different Kinds of Credit Cards
Having a variety of credit cards in your wallet can also help boost your credit score as it can make you seem like a responsible borrower. Credit cards for installment plans, home loans, and even car loans can have various effects on your overall score as well. In fact, there are loans that if you pay them in full, can have positive benefits on your credit score that can last for years.
Become an ‘Authorized User’ for Another Person’s Card
This one is a little tricky but very helpful if you can make it work. If you know someone who has a high credit limit and scores then consider asking them to let you be an ‘authorized user’ of their card.
No, you don’t need to use their card, you just have to be connected to their account so your credit score can be boosted. It’s worth noting though that this will work best if your credit file is still thin as the results will be pretty obvious.
Reach Out to Your Credit Card Company
This may be the last thing you want to do but it can actually help boost your credit score. Most credit card companies have temporary programs that are tailored to those who are having trouble paying their dues. Just reach out to them and say that you’re having a hard time and may miss a payment. Who knows? They might offer you a deal that can benefit both parties financially.
Seek the Help of a Credit Card Counselor
Asking for a professional’s help to tidy out your credit card woes is another great move especially if things are getting overwhelming. A credit card counselor can help formulate a management plan that works best for you and your current financial situation.
Your credit score will not magically improve overnight, so being patient with it is crucial if you want to reach your goal. What you can do now is apply the tips listed above, monitor not just your credit but also all of your finances, and make payments whenever you need to and you’ll surely see an increase in your credit score.
There are several ways to improve your credit score, and making an effort to actually do it is an excellent move to take whether you want to apply for a loan that can help you secure an expensive purchase or even just for moral purposes. It’s important to keep in mind though that it will not happen instantly or even in a day, it will take you weeks or even months to see positive changes.
Just be smart with the way you use your credit score, read articles that can help you make better financial moves, and apply the things we’ve shared with you, soon enough you’ll see your credit score going where you need it to be.