5 Ways to Improve Credit Score You Might Not Know About
"How to raise my credit score?" Just about everyone is looking for answers to this question. If you've looked into it before, you probably already know the expected ways to boost your credit score, such as paying more than the minimum and keeping debt below 30% of your credit limit. However, you might not have heard of some of these lesser-known ways of increasing your credit score; use these five tips to improve credit score fast:
1. Pay Largest Debts with Highest Interest Rates First
The more of your available credit is being used on a credit card, the worse the damage to your current credit score. When you have numerous debts, it can seem logical to pay off the smaller ones in full first; however, a goal of boosting credit score rapidly benefits more from paying down the largest debts with the lowest amount of credit limit currently available.
2. Pay Even Before Your Statement Comes Out
The total amount you owe makes up 30 percent of your credit score. Because of this, paying as much of the bill as possible before your statement can help your score tremendously. Your most recent statement date balance is the amount typically reported to credit bureaus, so the lower this number is at this time, the better your credit score. Find out when your card balance for each card gets reported, and try to pay something before this date. Get into the habit of making multiple payments throughout the month as your finances allow.
3. Have Positive Accounts Reported
Any account for which you are in good standing can help to raise your credit score and offset "black marks" in other accounts. Not all accounts are automatically reported, but some account holders will report your account as a service if you ask them to. If you have a good history with your cell phone carrier, cable TV company, internet provider or utility companies, call them and ask if they will report to the credit bureaus on your behalf.
4. Try for the "Goodwill Deletion"
If you've made just one or two late payments with a provider, you might be able to get these black marks removed from your credit report. Simply call the lender and apologize for the oversights, promising that you won't do it again. Many lenders will remove minor infractions as a courtesy.
5. Get a Credit Line Increase -- Then Don't Use It
Good "credit utilization ratio" is also key to a good credit score. The higher the available balance on a credit card, the better your credit looks. A balance of $300 on a credit card with a $400 limit can hurt your credit utilization ratio, while a $300 balance on a limit of $1,000 looks much better. Call and ask your credit card companies for a credit line increase to improve your credit utilization ratio -- but do not use it.
A high credit score is crucial for getting a home mortgage, financing a car or getting a loan for a business. Use these five lesser-known tips for raising your credit score and making yourself more appealing to lenders.
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