The topic of how to improve a credit score is certainly a persistent one among consumers. Common questions on the topic include: “Can I improve my credit score in 30 days?” “How do I improve my credit score after bankruptcy?” and “What’s the best way to improve my credit score?” … and there’s good reason for all the interest.
As most consumers who have applied for loans (and, especially, sizable loans) in the past are likely well aware, having a good credit score can deliver some big financial — and even everyday — benefits. Some of the perks to having a solid credit score may include easier credit card and loan approvals, lower interest rates on borrowed money, better car insurance rates, waived security deposits on utility accounts, and an increased likelihood of approval when applying for rental homes and apartments — just to name a few.
No matter the reason you’re looking to raise your credit score, some tried-and-true tactics may give it a quick boost. Ready to reap some of the benefits for yourself? If you’d like to improve your credit score — for any reason — consider these seven tactics that may bring it up quickly:
1. Make timely bill payments — Your credit history is the No. 1 factor used to determine your credit score. Therefore, developing a lengthy history of timely payments is the single best way to raise your score. Make a habit of paying your bills on time — and be sure to never let a bill go beyond 29 days late, as payments that are delinquent by 30 or more days can be reported to credit bureaus, resulting in a lowered score. If you do have a bill that is nearing 30 days late and you won’t be able to pay it on time, call the creditor to see if you can arrange a revised payment plan — some creditors may be willing to work with you on the payment timeline and due dates.
2. Make frequent credit-line payments throughout the month — Another big factor in determining your credit score is known as “credit utilization,” which is a measure of the percentage of your available credit that you actually use. Generally, by making frequent smaller payments to your credit lines each month (rather than one larger payment at the end of the billing cycle), you can help keep this percentage low — which may give your credit score a lift.
3. Request higher credit limits — This is still another method that may help to keep your credit utilization as low as possible. If you request and are granted a higher credit limit on any of your credit cards or other lines of credit, your available credit will typically rise — resulting in a lower credit utilization percentage and a higher credit score. This may be an especially effective tactic for quickly raising your credit score, as approval can be granted relatively quickly by most creditors. You can make such requests for each of the credit cards you own and lines of credit you have available, increasing the resulting impact on your credit score. (Note: Security Finance does not offer open-ended lines of credit or credit cards.)
4. Check for credit report errors, and dispute any you discover — As a U.S. consumer, you have a legal right to get a free copy of your credit report from each of the nationwide credit-reporting agencies — Equifax, Experian and TransUnion — once every 12 months. (To get yours, visit annualcreditreport.com and make your free request.) If you discover any errors that might be bringing your credit score down, you can dispute them and have them removed from your credit history, which may quickly improve your credit score.
5. Limit new account applications — While, as previously mentioned, it may help your credit score to have a large amount of available credit, there is something of a catch here. Each time you apply for a new line of credit, your potential creditor may make a hard inquiry on your credit report, which allows the creditor to determine how big a risk is being taken in offering you new credit. While each hard inquiry has a slightly negative impact on your credit score, a rash of credit applications can add up, cumulatively leading to a more significant hit on your credit score.
6. Keep credit cards open — Typically, having open credit cards — even if you have no plans to use them, and especially if they have a zero balance — raises the amount of credit you have available to you at any given time. Having a higher credit limit with unused credit results in a lower percentage of the total amount of credit available being used, which leads to a lower credit utilization and may result in a higher credit score.
7. Create credit diversity — If your credit availability is currently limited to credit cards, consider creating a more diverse credit mix by applying for (and making timely payments on) other types of loans. Personal loans can be an especially attractive route to raising your credit score, as they typically offer a few key advantages over credit cards in this area, including:
- Since personal loans are for a fixed amount of money, the temptation to spend more (and add more debt) may be much lower than with credit cards, which allow consumers to keep borrowing/adding more debt as they pay down their balance.
- Because personal loans offer a set payment schedule, borrowers are also less likely to skip payments — helping them raise their credit score.
- In most cases, personal loans can deliver lower total borrowing costs to consumers than credit cards.
Security Finance offers installment loans, which can often be secured within a single day. Further, Security Finance reports borrowers’ information to credit-reporting agencies Equifax and TransUnion monthly. This is a great way to diversify your credit availability and start building a good credit history quickly and easily.
At Security Finance, we offer a range of personal installment loans that can be secured quickly (usually within a single day) and with more flexible options than those typically found at a bank — all without the need for a bank account or a high credit score. Further, our installment loans follow set terms and offer affordable monthly payment plans, with no balloon payments or prepayment penalties.
Visit securityfinance.com today to learn more about all of our loan options — and to find the one that’s right for you.