No matter what your financial goals are, having a good credit score can help you achieve them. Your credit score impacts everything from getting approved for loans and credit cards to helping you secure a job or apartment.
If improving your financial standing is on your to-do list, we’re sharing our top tips for boosting your credit score quickly, including paying your bills on time, lowering your credit utilization, fixing errors on your credit report, and increasing your overall credit limit.
What is a Credit Score?
Before you start on efforts to improve your credit score, you should have a good understanding of what this number is. Your credit score is a number that represents how credit-worthy you are. The number typically ranges from 300 to 850, with higher numbers suggesting that you have a good credit history.
You credit score is calculated based on a number of factors, including:
- Your credit history
- Credit and loan payment history
- Credit utilization
- Length of your credit history
- Credit mix
- Recent credit checks
Having a good credit score is essential for overall financial health. A higher score can lead to lower interest rates when you apply for a loan, better terms for credit cards or loans, and even more opportunities for financial growth.
How to Check Your Credit Score
Frequently monitoring your credit score is a good habit that you should try to establish as quickly as possible. If you ever experience fraud or other financial troubles, these can quickly show up on your credit report and lower your overall score. The sooner you can catch these errors or fraud issues, the quicker you can resolve them and recover your credit score.
There are several places online to check your credit score for free, including credit monitoring services, credit bureaus, and even some credit card companies now offer credit score monitoring and reporting as part of their services.
You can also get a free copy of your credit report at www.annualcreditreport.com — this is the best way to check for big errors on your report and provides you with details on how you can report these.
5 Ways to Boost Your Credit Score Fast
Pay Bills on Time
While paying your bills on time is always a good practice, it’s also vital to do so to keep your credit score high. Late payments can lower your credit score, particularly if you miss payments or make several late payments in a row.
Late payments can also lead to other financial issues like late fees or interest charges which can quickly add up if not addressed as soon as possible. Setting credit card or loan payments to automatically deduct each month can be helpful if you’re concerned about missing payment deadlines.
Lower Credit Utilization
Your credit utilization is the percentage of available credit that you have in total. This is typically across all credit cards and loans that you have open at any given time.
Having a high credit utilization, or borrowing a large amount of credit, can indicate financial instability and is a possible sign to lenders that you’re more high risk than others. This can lower your overall credit score, along with making it less likely that lenders will be willing to lend you additional funds.
Pay down your credit as quickly as you can to lower your overall credit utilization. This is one of the best ways of boosting your credit score fast, as paid down credit debt is usually reflected in your score within a few weeks.
Request a Credit Limit Increase
If you increase the amount of credit you’re able to borrow, your credit utilization score will decrease. This is because, even without paying any debt down, the percentage of credit that you’re using compared to what you could use becomes smaller.
Requesting a credit limit increase, then, can help improve your overall credit score as your credit utilization is lowered. One of the best ways to do this is to contact your credit card company and explain why you want a higher limit. You’ll likely need to provide evidence of good payment history and financial stability, such as income statements or notifications of a recent raise.
Fix Credit Report Errors
Any mistakes on your credit report can lower your overall score and impact your ability to take out new loans or open credit cards. Around 1 in 5 people have errors on their credit report, so it’s vital that you’re proactive about checking your report at least once a year.
If you find a mistake on your credit report, you must contact the credit bureau as soon as possible and provide evidence of the error. Monitoring your report frequently can help you do this as soon as possible and prevent long term effects to your credit score.
Become an Authorized User
If you’re young or have very little credit in your financial history, your credit score will likely be low. As you build your own credit, you can be added to a trusted family member or friend’s account as an authorized user to benefit from their credit and payment history.
A positive payment history on the account can then boost both yours and their scores, making it easier for you to get better credit faster and start your own lines of credit. It’s important that whoever you ask to become an authorized user for has a good payment history of their own and low credit utilization.
Quickly Boost Your Credit Score Today
Having a good credit score is essential for building and maintaining financial health throughout your life. With lower interest rates and better credit options available to you, you can even save money over your lifetime simply by having a good credit score.
When you’re looking to boost your credit score fast, follow these tips and take control of your financial future. Check your credit score regularly and monitor for any errors. If you need additional support, the team at Jefferson Security Bank is here to help you reach your financial goals. Contact us today to learn more.