A higher credit score means more money in your pocket. It’s as simple as that. In this article, I’ll tell you The easiest ways to increase your credit score.
For someone with poor credit, a typical credit card can have an interest rate of 20%. If you take a balance of 5,000 on this card and pay $ 150 each month, you will pay more than $ 900 more than the interest alone over the next 12 months. Hit that rate up to 25% and the interest increases to about ،$1,200!
The Simple Way to Increase Your Credit Score:
Now, let’s say you’ve got great credit. Great credit is anything above 740. You are taking the same balance and making the same monthly payments, but your interest rate may be only 12%. You have offered about 500 interest in the first 12 months. This means you have saved about three full monthly payments – just because your credit was good enough to get you a low-interest rate.
Even a small increase in your credit score will have a real impact. For example, by increasing your credit score from 690 to 740, you can get a card with a lower interest rate instead of an average one. It makes less money out of your pocket in the long run.
Related: 8 Best No-Interest Credit Cards
While you can still get approved for some great credit cards with bad credit, some of the better offers and interest rates and given to those who have a higher credit score.
So how do you get good credit? An expert will tell you that the most important way to improve your credit score, in the long run, is to pay your bills on time, every time – and they are right.
However, there are other ways to increase your credit.
6 Easy Ways To Increase Your Credit Score
1. Know Your Score
It is important to note that there are numerous credit scores – many of which are meaningless. Why? Because the only credit score you must deal with is the institution from which you are trying to borrow.
In large-scale cases, this score comes from FICO, also known as Fair Isaac Corporation. Again, each of the credit reporting bureaus – Experian, Equifax, and TransUnion – present their FICO scores. Scores can vary greatly because each bureau has different information about you.
Ask your creditors what credit score they will use for their decision, and they will likely tell you. 90% of major lenders use the FICO score but some use your Vantage Score. By asking what credit score your lender uses, you can focus on fixing that score.
2. Dispute Errors
Once you have your credit report, look through all of your information to see if there are errors or information that you don’t recognize. If you find any errors you can dispute them with our free dispute letters.
Correcting these errors can be very quick in improving your credit. However, not all credit reports include errors nor does any error have a significant effect on your score.
3. Become an Authorized User
Another easy way to increase your credit score is become an authorized user on someone’s credit card. When you become an authorized user, you get the benefit of their credit history, their credit limit and on time payments.
How to become an authorized user?
It’s best to ask someone you are close with, such as your parents, other family members, friends, or business partners. These are the people who are more likely to trust you and add you to their credit card. Once you become an authorized user, they have the option of giving you a credit card that you can use or just leave you as an authorized user but without having a credit card. Without using a credit card you still get all of the benefits of the cardholder’s payment history, credit utilization, credit limit, and revolving credit. All will greatly improve your credit score.
If you can’t be added as an authorized user try buying a tradeline to boost your score.
Related: What Are Tradelines?
4. Make Large Payments
If you owe a lot of money on your credit cards or loans, this could be affecting your credit in a negative way. The amount you own is 30% of your credit score. So, if you can make a large payment or larger payments over a few months to get the amount you owe down this can greatly increase your credit score.
If you have too much credit card debt and you are paying a lot of interest across multiple cards consider getting a consolidated loan which will combine your debt into one monthly payment. Payoff is a great option to consolidate your credit cards or Curadebt to consolidate any medical bills, loans or tax debt.
Related: How To Pay Down Credit Cards
5. Increase Credit Limit
One of the easiest ways to increase your credit score is to call your credit card company or login online and ask for a higher credit limit. If you have had a credit card for a while, and are in good standing with the credit card company they will most likely increase your credit limit. When you increase the amount you can borrow but keep the amount you owe low this has a very large impact of your credit score.
Related: How To Increase Credit Limit
6. Use Your Monthly Bills
Did you know that you can use the bills you already pay, like Netflix, and your phone to increase your credit score? With Experian Boost you can link your bills that you pay on time and they will report each month to the credit bureau so you can credit for your on-time payments. On-time payments make up 35% of your score, so if you pay your phone, cable, and subscription services every month this is an easy way to increase your score.
Credit is very important if you plan on making any large purchases in your lifetime. So it is important to have a higher credit score. There are many easy ways that you can increase your credit score in a short amount of time.
Do you have bad credit, no credit, or want to learn how to become a credit expert?
Check out our credit repair training & learn:
- What your actual credit score is
- How to get a copy of your free credit report
- How to get your credit back on track today
- Travel for Free, Fly First Class & Earn Money