8 Ways To Increase Your Credit Score | Guiding Cents (2024)

Having a prime level credit rating can save you tens of thousands in interest throughout your lifetime. That’s why it’s so important to understand how the credit rating system works and play by the rules.

Years ago when I did mortgage lending I would see lots of credit reports every month and was amazed at the amount of people with poor credit. It wasn’t until I encountered several years of hardship as a result of the 9/11 attacks and the mortgage meltdown of 2008 that I fully understood what many of these people had been through.

Most of it wasn’t their fault. The best thing I could do for them and you is to show you what some of what I learned while in the lending industry, information top level bankers and lenders taught me, so you can get your scores above 720 and even above 800.

Improving your credit score is a process that involves responsible financial behavior over time. Here are three of the eight detailed strategies to help increase your credit score:

1. Pay Bills on Time

• Set up reminders: Use calendar alerts or set up automatic reminders a few days before your bills are due to ensure you never miss a payment.
• Automate payments: Many creditors allow you to set up automatic payments from your bank account. This can help ensure your bills are paid on time every month.
• Catch up on past-due accounts: If you have any late payments, bring them up to date as soon as possible. Late payments can have a significant negative impact on your credit score.
• Pay more than once in a billing cycle: If you can, make multiple payments in a billing cycle. This can reduce your credit utilization and keep your balance lower throughout the month.

2. Reduce Credit Card Balances

• Assess your debts: Make a list of all your credit card balances and prioritize paying off the ones with the highest interest rates first.
• Create a payment plan: Devise a strategy for paying down debt. This could involve the debt snowball method (paying off the smallest balances first to gain momentum) or the debt avalanche method (paying off the highest interest rates first to save on interest payments).
• Limit your credit usage: Try to keep your credit utilization ratio below 30%. This ratio is calculated by dividing your total credit card balances by your total credit card limits.
• Increase credit limits: If you have a good payment history, you might be able to ask your credit card issuer to raise your credit limit, which can help lower your credit utilization ratio. However, be cautious not to increase your spending.

3. Review Credit Reports and Dispute Any Inaccuracies

• Obtain your credit reports: You’re entitled to a free credit report from each of the three major credit reporting agencies (Equifax, Experian, and TransUnion) once a year through AnnualCreditReport.com.
• Review for errors: Carefully examine your credit reports for any inaccuracies. Look for errors such as incorrect personal information, accounts that don’t belong to you, incorrect account statuses, and incorrect payment histories.
• Dispute inaccuracies: If you find errors, dispute them with the credit bureau. You can do this online, by phone, or by

Increasing your credit score involves a combination of techniques that promote good credit habits and financial responsibility. Here are five more effective strategies to help boost your score:

4. Optimize Credit Utilization

• Keep Balances Low: Aim to use only a small percentage of your available credit. It’s recommended to keep your credit utilization ratio under 30%, and lower is even better.
• Pay Down Balances: If you have existing credit card debt, focus on paying it down. Consider making payments more than once a month to ensure your reported balance is low.

5. Become an Authorized User

• Find a Trusted Partner: If a family member has a credit card with a long history of on-time payments and a low balance, ask if you can be added as an authorized user on the account.
• Benefit from Their Credit: As an authorized user, the account’s credit history will be added to your credit report, which can help improve your score if the account is in good standing.

6. Diversify Your Credit Mix

• Consider Different Types of Credit: Having a mix of installment loans (like auto loans, mortgages, or student loans) and revolving credit (like credit cards) can benefit your credit score.
• Manage New Credit Wisely: Only apply for and open new credit accounts when necessary. Each credit application can result in a hard inquiry, which may temporarily lower your score.

7. Limit New Credit Inquiries

• Apply for Credit Sparingly: Each time you apply for credit, a hard inquiry is performed, which can ding your score. Apply only when needed and try to avoid multiple inquiries over a short period.
• Pre-Qualification: When possible, use pre-qualification options that don’t require a hard inquiry. This can give you an idea of whether you’ll be approved for credit without impacting your score.

8. Regularly Review Your Credit Report

• Check for Errors: Obtain your credit reports from all three credit bureaus at AnnualCreditReport.com and review them for any inaccuracies or fraudulent accounts.
• Dispute Errors: If you spot mistakes, file disputes with the respective credit bureau to have them corrected. Removing incorrect negative information can improve your credit score.

Implementing these 8 strategies can help improve your credit score, but remember that changes don’t happen overnight. It’s important to maintain good credit habits consistently over time for the best

Related content:

• 8 Ways To Increase Your Credit Score
• Credit Score Hacks: Tips and Tricks for Raising Your Score
• How to Improve My Credit Score Fast
• Credit Score Factors: Understanding the Components and Their Impact
• How to Increase Your Credit Score by 200 Points

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