64% of Americans entered 2021 carrying debt. If that’s you, that debt can often feel like a 2-ton boulder strapped to your back. Thankfully, no matter how much debt you have or how bad your credit score is, you can always build it back up.
In this blog post, we’ll show you 8 brilliant ways to boost your credit score, so you can take control of your finances and finally live debt-free!
1. Setup automatic payment
Often times people mean to pay their credit card bill but forget. Then the late fees/interest gets tacked on and before you know it, the bill becomes unmanageable. A smart way to beat this is to set up automatic payments. This will keep your bill from getting out of control by ensuring you never pay a late fee/accrue interest and boost your credit score in the process.
2. Take advantage of Experian Boost
Experian is not only one of the most accurate credit reporters, they’re unique Experian Boost feature can instantly boost your credit score. Some users have seen anywhere from 8 to 20-point increase!
Experian boost works by first allowing you to link your bank account. Then, it securely views your current account transactions. It looks at consistent bill pay on things like rent, phone bills, electric bill, etc., and will then boost your credit score accordingly!
3. Decrease your Credit Card Balances
This one doesn’t require much explaining. The best way to increase your credit score is by paying down your balances. Pay the minimum balance every money and then throw whatever extra money you have at it too.
Keeping a low balance shows potential lenders that you’re responsible with credit. Experts suggest keeping your credit utilization ratio below 30% of your credit limit at all times.
4. Get a secured credit card
Many people forget this option when seeking to build their credit score but it’s highly effective. A secured credit card uses your own money, which then acts as your credit limit. So, if you deposit $300 onto your secured credit card, $300 is your credit limit.
You can then use the credit card as you would any other, but with the deposit protecting the issuer from the possibility that you won’t pay off your balance.
5. Dispute credit report errors
Just because your credit report says one thing doesn’t mean it’s true. Sometimes vendors will report a payment as late or missing when it’s neither of those things. On other occasions, your credit report will show a payment that you paid off months or even years ago.
If you notice errors like these, file a dispute with the appropriate bureau. It’s free and can help increase your credit.
6. Limit new lines of credit
When you’re trying to build your credit, it’s best not to apply for a new credit card for a while. This is because every time you do so, a hard inquiry appears on your credit report. This doesn’t look and will decrease your score.
If you absolutely need a line of credit, do research beforehand so you avoid applying for multiple cards.
7. Pay off your credit card every month
Another trick to building your credit, is zeroing out your balance each statement period. This keeps your credit utilization low, which is one of the best ways to strengthen credit. Another benefit of doing this is that you’ll avoid paying interest charges.
8. Get a credit-builder loan
If you have no credit or are trying to recover from a hit to your score, consider getting a credit-builder loan from a credit union. When you get a credit-builder loan, themoney you agree to borrow is deposited into a bank account held by the lender. Then, for 6 to 12 months you’ll make fixed payments.
During that time, the lender will report your on-time payments to the credit bureaus, boosting your score.
The one thing all of these credit-boosting tips have in common is the need for patience. Your credit score didn’t get to where it is overnight, so it won’t bounce back overnight either. Be consistent, be patient and before you know it, you’ll reach your credit score goals!
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