We all have struggled with our credit standing at one point in our lives. Those three little digits tell lenders if we have the ability to pay them or not for loans that we apply for.
Whether we sign up for personal loans in Idaho or apply for a mortgage loan in Indiana, our credit scores help lenders decide whether to grant them to us or not. If you’re looking at getting a loan to help you better manage your finances as you pay for your student loan or your car, you will need to improve your credit score.
6 Ways to Bring Your Credit Score Up
1. Pay your bills on time
No matter how much you strategize, if you fail to meet your payment deadlines, your credit score will not go up. Be disciplined enough to make those payments on time. If you’re having problems organizing or you’re just the forgetful type, set payment reminders in your calendar.
Remember that consistent monthly payments can increase your credit score in just a matter of months.
2. Make small frequent payments on your card monthly
Do your best to make smaller and more frequent payments in one payment cycle. If you have the means, pay your bills every other week instead of doing it once a month. This improves your score as it lowers your credit utilization.
3. Dispute credit report inaccuracies
Make it a habit to review your credit report and see if it’s accurate. If you spot errors in the report, dispute the inaccuracy immediately. Your credit score will improve instantly as soon as the agency has been informed of the error and the mistake has been corrected.
4. Be an authorized user
Ask a family member, relative, or friend with a good record of credit card use and a high credit limit to authorize you as a user. You don’t need to use the card, nor do you need to know the account number. By association with the account, you already benefit from it as it helps increase your credit file, lower your credit utilization, and give you longer credit history.
5. Avoid closing unused credit cards
If you have a credit card lying around that’s seldom used, do not close the account. Keep it open as long as they don’t cost you annual fees. Closing the account might increase your credit utilization, which is something you want to avoid if your goal is to increase your score.
6. Avail of a debt consolidation plan
While this may seem counterintuitive because of the temporary drop it will bring to your credit score, a debt consolidation plan may help you in the long run. As long as you keep meeting your payments on time, your credit score quickly goes up and you end up eliminating the debt that gave you problems, to begin with.
Can your credit score go up by 100 points?
Yes. If your credit score is on the lower end of the spectrum, you are in a great position for a 100-point gain. According to Rod Griffin, public education director for Experian, the lower a person’s credit score, the bigger their chances of getting a 100-point increase. He claims that even the smallest change can get one greater score increases.
Improving one’s credit score may seem like a daunting task but it is very possible as long as you are determined and disciplined enough to make it work for you. After all, we’re talking about your life here.