If you hope to use credit or apply for a loan someday, you must begin working on raising your credit score today. A decent credit score simply cannot be earned overnight. It takes a while to boast of a good credit standing, and takes patience and good behavior. Listed below are a few tips and tricks you probably did not know that can help you make it faster and easier to fix credit score.
Use a Buddy System
If you are new to the country and do not have a credit to begin with, or are a student who has never had a credit card of your own, you could be added as an authorized user on a credit card owned by a family member.
Having an authorized card in your name via their account is a great way to begin adding payment history to your own credit file.
It is, however prudent that the primary card holder who is willing to add you to his or her account must be someone you know and deeply trust. Do not tie your account with a boyfriend or someone you just met to boost or fix credit score. That is irrational and financially unwise.
Pay as Often as You Can
In order to get yourself a suitable credit score, you must use as little of your available credit as you can.
According to experts, your credit utilization should always remain lower than 30%. If you can keep it under 10% your credit score will rocket higher. This can be hard, especially if your credit card has a limit of just $500.
If you will need to use your credit card a lot, but do not want to hurt your utilization rate, you could make multiple payments each billing cycle.
This helps in that credit companies, report customer balances to credit reporting agencies frequently, so paying up your balance quickly and as often as you can will ensure that your reported balance is always low.
While this doesn’t mean you must make a payment toward your card every two days, ensure that you keep tabs on your purchases and never miss paying on the actual due date to fix credit score.
Strategically Open Accounts
Do not apply for credit as per your whims and fancies. Applying for credit must be done very sparingly. This is because applications can result in a hard inquiry on your existing credit report and will dock your score a couple of points.
Reporting a Card Lost to Fix Credit Score
Now, this is a rather obscure one, but can indeed help in saving your credit score from plummeting. When you report your card lost, the bank closes that account and creates a new account number, while moving all your history into the new account, including fine details such as the original opening date and add the new account which goes into your credit report.
This is borderline unethical, but can come in handy as credit age contributes to about 15% of your credit score.