Boosting your credit score can have huge benefits. From making it easier to take out a mortgage to being approved for an apartment rental, a good credit score opens up a whole world of possibilities. If your credit score isn't as high as you would like it to be, you're in the right place. Below, we outline our top tips and tricks for raising your credit score - and fast!
Pay credit card bills on time
The first step in boosting your credit score is to pay your bills on time, as your payment history is one of the most essential elements used to calculate your credit rating. One late payment can lower your credit score, however, a long history of on-time payments can increase it. To boost your credit score, make sure you never miss a credit card payment by more than 29 days. Setting up automatic payments for the minimum amount due can help ensure you stay on track. You should also set reminders to pay specific bills, such as gym memberships, phone bills, or subscription services.
Limit how frequently you apply for new accounts
Though we all need to open a new account from time to time, a good rule of thumb is to limit the number of new accounts you apply for. Every credit application - whether it be a credit card or a mortgage loan application - results in a hard inquiry. The more hard inquiries you have, the lower your credit score will be, especially if you apply for lots of credit over a short period. Plus, every time you open a new account, it decreases the average age of your other accounts, which could also negatively impact your score.
Use a secured credit card
Another way to boost your credit card is by using a secured credit card. This might be especially useful for people with a low score that are looking to rebuild. This type of credit card uses a cash deposit system, whereby you pay a deposit for the card up front, and the deposit amount equals your credit limit. You can use it just like you would a normal credit card.
Increase your credit mix
Increase your credit score by adding to your credit mix. While this might seem counterintuitive to our tip about limiting how frequently you apply for credit, applying for certain types of credit may have its advantages. For example, applying for a new credit account, especially if it's a type you don't have, can actually help boost your credit score. If you currently only have a credit card, consider taking out a loan or line of credit to diversify. Lenders will take into account the credit mix when deciding whether to lend you money. If they can see that you've successfully managed multiple types of credit, they may be more likely to approve your application.
