Boost Your Credit Score: Three Quick Tips
Typically, a high credit rating takes years of careful curation. However, for those who need to increase their score quickly, there are a number of useful ways to raise that rating.
1. Repay a loan
Your credit score is majorly affected by utilization. Utilization refers to how much of your available credit you’re using. In an ideal world, you will be using 30% or less of your available credit. As such, someone with a $10,000 credit limit should never be in more than $3,000 of debt. Should their outstanding balance exceed this figure, their credit score will suffer.
For those with high utilization, loan repayments could help to address a low credit rating. If the individual in the previous example owed $4,000 across multiple credit cards, they would be sensible to pay off $1,000 of that debt, bringing their utilization down to 30% of their $10,000 limit.
To generate some extra cash, you might consider selling unused items, working overtime, or taking on a second job.
2. Apply for a higher credit limit
As we have seen, low utilization will boost a credit rating. If it’s not possible to quickly repay a portion of your debt, you could instead apply for a higher credit limit. By increasing your credit limit, you will automatically reduce your utilization. Provided you’ve been a customer for a while and have made your payments on time, your application is likely to be accepted.
3. Fix faults in your credit report
Your credit report provides an overview of your financial behavior. You are entitled to a free annual report from each of the three key credit bureaus. It’s always worth scrutinizing this report and checking for mistakes. If you correct an error, you may improve your credit score.
Reports suggest that over 20% of us have a significant mistake on our credit reports that could be negatively impacting our scores. For instance, you might spot an outstanding balance for a utility bill that doesn’t belong to you. If you can prove this isn’t yours, your credit score is likely to increase.
With a strong credit rating, you will be able to borrow money in an affordable manner. Take these three steps to enhance your report, and boost your score in no time at all.