If your credit score isn’t quite where you want it to be, how can you improve it? Maybe you’re looking to buy a new car or apply for a new apartment. You’ll need good credit to do these things. The bad news is there’s no way to improve your credit score overnight. The good news is that it isn’t complicated to do. Follow our credit counseling advice to boost your credit score.
Easy Ways to Boost Your Credit Score
Pay Your Bills On Time
This sounds like a no-brainer, but it really is one of the best ways to boost your credit score. Payment history is the most important factor in determining your credit score. This is why it is so important to pay your credit cards and other bills on time. Ideally, you should also be paying in full if possible. After a few months of positive payment history, you should see an increase in your credit score. If you’re struggling to pay credit cards on time and are dealing with debt, ACCC can help with debt management.
Keep Your Credit Utilization Ratio Low
Your credit utilization rate is another important factor in your credit score. This refers to the amount you spend on your credit card compared to your credit limit. If you have a credit card with a $1,000 limit and you spend $500, your utilization rate is 50%. To improve your credit score, you should decrease the amount you’re spending on your card significantly. Ideally, you should keep your credit utilization rate under 30%, or lower if possible.
Don’t Open New Credit Accounts
Another easy way to boost your credit score is to do nothing! No, really. Don’t open up any new credit accounts if you don’t need them. Any time you apply to open up a new credit card or apply for a loan, you get hit with a hard inquiry on your credit report. Too many hard inquiries on your credit report can decrease your score. If you did this in the past, don’t apply for anything new for a few months, or even a couple years if you can wait.
Try Experian Boost
Usually, utility accounts such as internet, cable, and electricity aren’t considered on your credit report. The only time they will impact your credit score is if you are late on your payments and they get sent to collections. However, with Experian Boost, your positive payment history on these utilities can count towards helping your credit score! If you choose to sign up for Experian Boost, that means your utility accounts can start benefitting your credit score, so it’s extra important to pay attention to when those are due.
Get a Secured Credit Card
What if you have no credit history? You might not even have a credit score. Without a credit score or credit history, you probably can’t get approved for any loans or credit cards. How do you boost your credit score when you don’t have one? One of the ways to boost your credit score if you don’t have much credit history is to get a secured credit card. Secured credit cards require a deposit which is usually equal to the amount of credit available on the card. They are designed for people with little to no credit history, so it’s easier for you to get approved for a secured card than a regular credit card. Other than the initial deposit and the lower credit limit, secured credit cards work just like regular credit cards. Make your payments on time and don’t use too much of your available credit, and you should see an increase in your credit score.
Final Tips on Ways to Boost Your Credit Score
Most of these ways to boost your credit score are just good credit practices in general. There are no secrets to improving your score or building credit. It’s not something that can be done overnight, but it is achievable within a few months. As long as you pay attention to when your bills are due, pay on time and in full, and use your credit cards responsibly, you should be well on your way to reaching a 700 or higher credit score!
If you struggle to pay off debt, ACCC can help. Schedule a free credit counseling session with us today!