Raising your credit score can seem like a daunting task, especially without knowing where to start. Credit literacy is something that plenty of adults struggle with. There are a few simple ways to improve your credit score so that you’re finally on your way to achieving your financial goals.
You may be looking to buy your first home, purchase a new car for yourself and your family, or even wanting to start your own business. With the right credit score, you can reach those goals in no time. After all, the higher your score, the better terms you can get on loans and credit cards.
Can you boost your credit score instantly?
One important thing to note about boosting your credit score, is that regardless of people telling you it’s possible to raise your score overnight – the real truth is that it takes time.
With the right steps, you can boost your credit score and be on the right track to accomplish your financial goals in no time at all. The hardest part about raising your credit score is knowing where to start.
Below are some simple ways to start boosting your credit score.
Dispute credit report errors.
The first step in improving your credit score is to obtain a copy of your credit report and dispute any errors that may be reported.
You can request a free copy of your credit report from all three credit bureaus once a year.
Credit Sesame is a safe and secure app that provides free credit monitoring. Although Credit Sesame pulls your information from one of the three credit bureaus, it’s a super helpful tool for viewing and reporting any potential credit report errors.
Pay on time.
Paying on time is the BIGGEST factor for improving your credit score. In order to see improvements, you need to make a commitment to pay all of your bills on time, or even early, to avoid reports of late payments.
Every delinquent payment reported can negatively impact your score and can stay on your report for seven years.
If you know you’ll be late, the best thing to do is to call your creditor and set a payment arrangement. Most creditors won’t report late payments if communicate your willingness to pay.
If you still can’t seem to make payments on time, consider setting yourself a monthly budget, cutting out expenses, and seeking financial help if you need to.
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Use secured credit cards.
The easiest way to start and establish your credit history is using secured credit cards. Secured credit cards are types of credit cards that are backed by a cash deposit made by the account holder. These are great for establishing good credit if you find yourself constantly being denied for a traditional credit card.
Depending on the amount you deposit, this will serve as collateral if you ever default on payments. The deposit reduces the risk for credit card issuers and provides an easy way for the account holder to establish and/or build their personal credit.
The better you get at maintaining your secured credit cards, the better your chances of being approved for an unsecured credit card down the road.
Credit Sesame works with lenders tailored to your specific credit needs to help you build your credit through secured credit cards, all for free.
Keep your credit usage down.
With new and current accounts, you want to take note to keep your credit usage to about thirty percent. The more credit you use, the more impact it has on your overall score – this is also known as your utilization rate, which has the second biggest impact on your credit score.
Credit Sesame is a great tool for monitoring your credit usage. This free service helps you determine where you are exactly in your road to credit recovery and gives you real tips on how and where to improve.
Once you sign up, Credit Sesame will monitor your overall credit usage, allowing you to see in real-time, where you are versus where you need to be – and gives you personalized tips on how to get there.
Raise your credit limit.
Raising your credit limit can help keep your credit usage down. You can request a raise with your current credit card lenders, or open a new account that you know you can pay off on time.
If you’ve been making payments on time and have current, open accounts, requesting a credit increase might be a good way to instantly boost your credit.
Mix your current accounts.
Having only one type of revolving account open can keep your current score stagnant. Try mixing them up. This includes a personal loan that you know you can pay back, paying off your student loans, a mortgage, or even an auto loan can help boost your credit score.
Be sure to make a commitment to pay all of your revolving accounts on time. Credit Sesame makes viewing all of your open accounts and account types super easy with their mobile app and website.
Credit Sesame does a great job of letting you know what types of accounts you may want to focus on opening so that you can see an increase in your credit score.
Overall, improving your credit score takes time. It may seem like a difficult thing to do, but in reality, it’s all about making small commitments over a short period of time to see results.
Having tools like Credit Sesame and other credit monitoring software can help you tremendously and serve as a personal guide to help you along your credit journey.