Most individuals are not much concerned about their credit scores until when they have to apply for a loan. If you want to get financing and you are not even sure if your credit score is high enough to get you approved, you need to take quick actions to ensure that your chances are improved.
Fortunately, there are ways that you can boost your credit score in record time. It’s important first to understand how credit scores are determined to be able to improve yours. Here are seven tips to help boost your credit score.
Check your Credit Report
Boosting your credit score will begin by making an evaluation of the credit score. This involves requesting a free copy of your credit report to know where you stand and check for errors. Errors are likely to occur since a credit report contains data used to determine your score. Ensure that the payment dates and amounts owed are correct. In the case of any errors, you can dispute them with the credit bureau.
Pay down your balance
Your credit score is determined by how much credit you have and how much you are using. Therefore, you should find out how much you owe as well the interest rate. You also need to stop using your credit cards. Come up with a payment plan to help you make debt payments towards the cards with highest interest rates.
Pay bills on time
If you want to get financing for a major purchase, you might be interested in a large sum of money. Even if are sitting on piles of saving or juggling bills, paying bills on time is a great ingredient in boosting your credit score. If you are bad about paying your bills on time, you are hurting your credit score.
Open new credit accounts
Opening new credit accounts will help improve your credit utilization rate since your score is determined by all your credit cards amounts and balances together. However, do not open multiple accounts just to have a better credit mix. This will make you appear desperate when seeking a loan. Only apply for one or two cards.
Under-use your cards
Yes, you need to get new credit accounts. But this does not mean having to use the cards to pay for everything. Your credit utilization rate should not be more than 30%. A lower credit utilization ratio is better if you want to boost your credit score.
Become an authorized user on somebody else's card
If all the other options are not convenient for you, you might try finding someone who can add you to their existing account as an authorized user. This should be an individual who pay their bills responsibly and on-time. It will help lower your credit utilization ratio, and as a result, you get a boost in your credit score.
Raise your credit limit
Another way of boosting your credit score is by requesting a higher credit limit. You can contact your creditors to ask for a credit limit increase. However, it will only work if you control your spending habits accordingly. Your credit card insurer may comply if you have a decedent credit history.
While this guideline will help give you a boost in your credit card score, you won’t see results overnight. It all requires patience and discipline. Once your scores improve, be sure to maintain the habits or else, you will find yourself doing this all over again.
If you would like to learn more about credit scores and how you can boost yours, contact Rocky Mountain Credit Union today!
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