Your credit score is one of the most important measures of your financial health. It tells lenders at a glance how responsibly you use credit. The better your score, the easier you will find it to be approved for new loans or new lines of credit. A higher credit score can also open the door to the lowest available interest rates when you borrow. If you would like to boost your credit score, there are a number of quick, simple things that you can do. While it might take a few months to see an improvement in your credit score, you can start working toward a better score in just a few hours.
It takes less than a couple of days to pull all your credit reports from the three major credit bureaus, and assessing your credit score is the first step to raising it. In just a few hours, you can set due-date alerts for bills, so you know when a bill is coming up. Paying your bills on time Is one of the most important steps in improving your credit score. Pay down your credit card balances to keep your overall credit use low. You can also phone your credit card company and ask for a credit increase, and this shouldn’t take more than an hour. Don’t close old credit card accounts or apply for too many new ones. You can sign up for credit monitoring services quickly, and they will help you keep on top of your credit score.
Why Does a Good Credit Score Matter? A good or excellent credit score will save most people hundreds of thousands of dollars over the course of their lifetime. Someone with excellent credit gets better rates on mortgages, auto loans, and everything that involves financing. Individuals with better credit ratings are considered lower-risk borrowers, with more banks competing for their business and offering better rates, fees, and perks. Conversely, those with poor credit ratings are considered higher-risk borrowers, with fewer lenders competing for them and more businesses getting away with high annual percentage rates (APRs) because of it. Additionally, a poor credit score can affect your ability to find rental housing, rent a car, and even get life insurance because your credit score affects your insurance score.
Review Your Credit Reports (should take an afternoon)
To improve your credit, it helps to know what might be working in your favor (or against you). That’s where checking your credit history comes in. Pull a copy of your credit report from each of the three major national credit bureaus: Equifax, Experian, and TransUnion. You can do that for free once a year through the official
AnnualCreditReport.com website. Then, review each report to see what’s helping or hurting your score. Factors that contribute to a higher credit score include a history of on-time payments, low balances on your credit cards, a mix of different credit card and loan accounts, older credit accounts, and minimal inquiries for new credit. Late or missed payments, high credit card balances, collections, and judgments are major credit score detractors.
How often should you check your credit score? You should check your credit score regularly to check for errors, but make sure that you do so through soft inquiries so that your score isn’t dinged. Many banks offer free credit monitoring to their customers; check with yours to see if you can enroll in their service and get alerts whenever your score changes.
How can you quickly improve your credit score? Check your credit score to see why it is low. Pay down your revolving credit as much as possible to lower your credit utilization percentage. Have inaccurate things removed (especially late payments). Be added as an authorized user to an old account with perfect payment history, ideally with a low utilization rate. Ideally, this is done by a friend or relative, and they do not even have to give you the card. You can also pay certain credit repair services that will broker a deal between you and a stranger to do this.
