A good credit score makes your financial life easier. In many cases, you can take out bigger loans when needed, you’re eligible for the best interest rates, and you may have an easier time being approved for credit in the future.
Unfortunately, not everyone boasts a solid credit score, and for many people, a very low score is stopping them from achieving their goals and living their best lives.
While your credit score might be the result of some bad habits – biting off more than you can chew, or late payments – there is still hope.
You should, of course, focus on fixing those bad habits; but while you’re trying, here are three quick ways to get that score up.
1. Pay As Much Into Revolving Credit As Possible
If possible, try to put extra money into any revolving credit debt. Only paying the minimum each month reflects poorly on your overall finances because it gives the impression you’re more reliant on credit than is financially responsible. Unsurprisingly, this damages your credit score.
But adding even a small sum over the minimum payment can make a big difference. Plus, the faster you pay revolving credit, the faster you may be able to raise your score. So skip that gourmet coffee concoction a few times a month, and redirect those valuable dollars to paying down any revolving credit bills.
2. Get A Limit Increase
Your credit utilization rate is one of the most significant predeterminers of your credit score. This figure indicates how much credit you have to spend at any given time.
If you apply for an increased limit or even get a new credit card, this immediately increases that rate and will improve your overall credit score – that is, as long as you make the payments.
Unfortunately, the opposite is also true, and if you have many cards that are all maxed out, your score may drop even lower.
3. Double-Check Your Report
Credit reports – the information on which your credit score is based – take notoriously long to update automatically. Studies show that as many as 25% of Americans have an error on their reports. As a result, old entries that include late payments or other defaults might still be on your report, which will bring down your score.
You can access your credit report for free every year from three national credit reporting companies, so you should check your report and score regularly, remaining vigilant to any outdated entries. If you find them, promptly let the company know and request that your credit report be updated to reflect the current truth.
Often, the companies that reported you are at fault for not removing the entries once they’re settled. So you might need to be a bit persistent, and if you have serious issues, you should seek legal advice.
These are three, quick ways to get started on the journey of improving your credit score. Remember, your credit score is designed to protect you from taking credit you can’t afford, and also protects credit providers from giving credit to someone already overburdened.
Your credit score and your finances will improve and thrive if you’re responsible, disciplined, and living within your means as much as possible.