Want better credit? Not sure how to get it? If so, you’re not alone. According to CNBC, many Americans either have incorrect, or little knowlege about what it takes to achieve excellent credit. Not to fear, ScoreShuttle is here with 5 tips you can do now to help you improve your scores.
#1 Always pay your bills on time.
According to Equifax, a single 30 day or more late payment could drop your score by as much as 90 to 110 points! This shocking number is based on FICO data from a consumer with a 780 and no other missed payments on any credit account. The score impact you may experience from a late payment may vary depending on your current score, how severe the late payment is, how recent it is, and how frequently you’ve paid late, among other factors; but staying current on your bills is great way to avoid any kind of delinquency drop. Here’s what you can do to stay on track:
- Set up auto-pay so you never miss a due date.
- If auto-pay isn’t an option, schedule calendar reminders before each bill is due.
- If you can’t afford your payments, whatever you do, don’t default! A default could drastically decrease your score and can stay on your report for up to 7 years!
If bills are a problem, here’s a solution: call your lenders and ask if they offer internal hardship assistance. Programs such as this can help you reduce your monthly payments until you’re able to get back on your feet. It’s not a guarantee, but you might be surprised to learn how many businesses are actually willing to work with you during a time of need.
#2 Correct report errors.
Are you sitting down? Good, because a whopping 79% of credit reports are said to contain at least one error! Inaccurate claims, misleading data or downright false items can all affect your creditworthiness. If you’re not sure what’s listed on your report – or if you need assistance understanding your options, ScoreShuttle may be able to help. To speak to a credit coach, call (858) 866-9928. If you’d prefer the online route, ScoreShuttle’s technology can analyze your reports, highlight possible errors and give you the ability to challenge incorrect information, digitally. Pending the amount and level of errors potentially listed, removing them could help you increase your score! To get started, click below to access not just 1, but all 3 of your credit reports.
#3 Stay under a 30% card utilization rate.
Here’s how it works. If you have credit cards, ideally you’ll want to keep a balance at, or under, 30% of your credit limit each month. For example, if you have a credit limit of let’s say, $1,000, you should keep a revolving balance of $300 (aka 30%) or less. How does this help? The more unused, available credit you have on hand, the more appealing you may be to potential lenders. Ultimately it shows that just because funds are available to you, doesn’t mean that you’re necessarily going to spend every penny of it just because you can.
#4 Request an increase in your credit limit.
If you have a track record of successful payments, try calling your credit card company and request an increase in your available limit. As we mentioned in tip #3, even if you don’t use the additional credit, simply having it available to you demonstrates a sense of financial responsibility and could help you raise your score.
#5 Diversify your profile.
Being in good standing on a single loan or credit card is a great start; but if you’re looking to improve your credit, you’ll need to diversify your profile. Having a mixture of credit cards, student loans, installment loans (i.e. a car loan, personal loan, mortgage, etc.) may help you boost your score. The key is to have different forms of credit that are all in good standing. With that said, opening up 12 new credit cards or getting a loan that you can’t afford is not the trick. For a higher score, you should have a combination of the various forms of credit and debt listed above paired with a history of successful payments.
To sum up the score boosters above, here’s a quick recap…