You already know that your credit score can be the key to unlocking lower interest rates on everything from credit cards to a mortgage. A high score can also help you gain significant perks like a top-notch rewards program with your card company, and even helps to keep auto insurance rates low. But the downside is that you can miss out on these things, if you miss the minimum score by just a point or two.
While it takes years of diligence to build a great credit score, there are a few things you can do to boost your score just a bit. You won’t see the change overnight, but in most cases these little tricks can bump your score within a month or two.
Request a credit line increase. Part of your score is based upon the ratio of credit you’re using, to the credit you have available. Bumping up your available credit is therefore one way to widen that gap. However, ask your card company if a credit line increase will require a “hard pull” from the credit bureaus. If so, taking this step can actually bump you down a few points temporarily, even if it helps you in the long run. Also, remember not to use your new higher line of credit, or you won’t get anywhere at all.
Pay down debt. Obviously, another (and usually better) way to manage the aforementioned ratio is to pay down your debt. One tax return or work bonus can make a significant dent in your debt load.
Get yourself added as an authorized user. Let’s say your spouse has the better credit score. If he or she adds you to one or two of their credit accounts as an “authorized user”, this will help to build your credit history over time. Of course, this only works if they continue to maintain timely payments.
Ask your credit union about a credit builder loan. These types of loans are usually used by those who have more troubled (or simply absent) credit histories. However, if you’re trying to recover from a negative event in your past, this might be a good solution for you.
With all of these tips, remember that results can vary and that nothing is guaranteed. But taking a step forward is almost always better than doing nothing at all.
Making an appointment with a credit counselor can help you identify more options. In the meantime, don’t hesitate to contact us if you have other questions relating to financial planning.