If you are in the process of shopping around for a loan or mortgage or just are looking to improve your financial outlook for years to come, you may be wondering how to boost your credit score. It is, in the simplest of terms, a numerical figure based on a thorough analysis of your credit files that represents your creditworthiness. If your credit score is high, your loan or mortgage applications are likely to be approved. If your credit score is low, your loan or mortgage applications may be declined, and you be considered high-risk. If you are looking for ways to boost your credit score, continue reading to familiarise yourself with a number of helpful tips and tricks.
- Pay your credit card bills strategically
If you tend to pay your credit card bills at the last possible second, paying your credit card bills strategically can be a great way to boost your credit score. It may, for example, benefit you to know that the portion of your credit limits that you are using at any given time is referred to as your credit utilisation and that it is good practice to use 30% or less of your credit utilisation if and when possible, with less than 7% the unofficial sweet spot when it comes to boosting your credit score. In addition, it may also be worth taking the time to ensure your balance is low whilst it is being reported to the relevant credit bureaus as this can directly impact your credit score. In order to do so, pay your credit card bills before the current billing cycle ends or pay as you go at regular intervals throughout the month to prevent your balance from snowballing. If you have ever found yourself wondering “should I close my credit card after paying my credit card bills”? It may be helpful to familiarise yourself with Tally’s article.
- Pay your bills on time and in full
In addition to paying your credit card bills strategically, you must pay your bills on time and in full. If you consistently pay your bills in separate instalments or a number of days late, any strategy you employ in an attempt to boost your credit score will be ineffective. If you are prone to paying your bills late, it may also benefit you to know that this information can remain on your credit report for up to a decade. If you forget to pay your bills by a minimum of 30 days, on the other hand, you must inform the creditor at the earliest convenience and ask whether it would be a possibility if they could no longer report the missed payment to the relevant credit bureaus. If this is not an option that they are willing to consider, it may be worth getting current on the account as soon as possible with every delinquent account recorded only continuing to harm your credit score as time goes on.
- Dispute any errors to your credit report
If you have ever noticed any errors on your credit report, you must take action immediately as this can end up boosting your credit score in a matter of minutes. If you fail to do so, however, your credit score may be negatively impacted. In order to do so, you must remain on the lookout for a number of common mistakes such as any payments that are marked as late when you paid on time, a fellow user’s activity intermingled with your own, or negative or derogatory information that has been listed for a period of time that exceeds the timeframe within which it can legally be listed. If you have identified any errors previously but have failed to take action, there is no time like the present to take steps to dispute them. It may take a considerable length of time to do so but the entire process is worth it if it means you can boost your credit score and, perhaps most importantly, successfully apply for a loan or mortgage in the not-so-distant future. If you are anticipating a particular milestone in your future, however, you must do so with plenty of time to spare.
- Ask for a higher credit limit
If you are looking to boost your credit score quickly and efficiently, it may be worth asking for a higher credit limit. It is a common misconception that asking for a higher credit limit damages your credit score but this can only occur if your credit utilisation increases as a result. If your credit limit continues to rise but your balance stays the same, for example, your credit utilisation automatically decreases, and your credit score automatically rises as a result. In addition, if your income has increased in recent years or you have added years of positive credit experience, your chances of receiving a higher credit limit can be boosted. It may not have even crossed your mind in the past, but it is increasingly important considering the fact that credit utilisation can be a determining factor when it comes to your credit score. It is also only likely to take a short amount of time to do so and you may also be able to avoid a hard credit inquiry in the process as this can cause your credit score to temporarily plummet.
If you are looking to do whatever it takes to boost your credit score in anticipation of a major financial milestone or ahead of applying for a loan or mortgage, there are a number of steps you can take to do so. This includes paying your credit card bills strategically, paying your bills on time and in full every month, disputing any errors to your credit report, and asking for a higher credit limit. In doing so, you can improve your financial outlook for years to come and even master the art of money management for the future of yourself as well as your loved ones.