Sometimes figuring out your credit score can feel intimidating, or you may feel like you have little or no control whether it increases or decreases. Here are 5 things you can do to make a positive impact on your credit.
Pay Your Bills On Time
This one step will have the greatest impact on your credit score. This may seem like an easy task, but there are lots of reasons bills don’t get paid on time. Here are a few ideas to help make paying your bills on time a more simple process:
Set up Bill Pay
Most financial institutions offer free (or minimal charge) online bill pay. You just have to go in and set up the vendors with account numbers and payment information. There are even some companies who will send your Invoice right to your bill pay.
Set ACH Debits with the Vendor
Some vendors have an option to pull the funds directly out of a savings or checking account. You can set up automatic payments by logging in to vendor’s online system or by calling customer service. Make sure you have your institutions routing number and account number in order to set this up.
Create a spreadsheet of your monthly bills
List all your monthly bills and the date they are normally due. Then set up a specific time to review the list. This way, you can be aware of invoices or statements that may not have arrived in the mail or if there is a payment that you forgot to add to your online bill pay.
Dispute Credit Agency Errors
If you recently paid off a loan, you will want to check back frequently to make sure it gets updated. You might also find that a payment is posted late when it was actually made on time. It does take some work to get these errors removed, but it is absolutely worth the effort. You can go to any of the reporting agencies and request a credit report. Most of them charge a fee, but it is usually minimal and can give you detailed information about your credit. Learn more about credit agencies here Credit Score FAQs
Keep Credit Lines Open
If you have a credit card that is paid off and you rarely use it, keep the credit line open. This helps your overall credit limit. You will have to use the card every once in a while or the issuer might close it. Just make sure you pay off the amount quickly to avoid finance charges.
Request Higher Limits
Having more limits on your credit cards or accounts can help your score, but only if you keep low or no balance on your card. If you do have to keep a balance on a card, it is best to have it utilized to only 30% of the total limit. If your card or account is utilized to 100%, this will quickly lower your credit score. Requesting more credit on an account and keeping little to no balance show the credit agencies that you are financially disciplined, which can increase your score.
Become an Authorized User
If you have someone close to you with a higher credit limit and a long history of good payments, ask them if you can be an authorized user on the account. You don’t have to make purchases or even use the account at all. Just remember that using their account irresponsibly can greatly damage their credit and yours. It could also cause problems with the relationship.
Is it possible to raise your credit score by 100 points? Yes! If you have a lower credit score (575 or lower), it is easy to make small changes that have a great impact on a low score. If you already have a good to great credit score, making good choices and polishing up small details can make a difference.
We can help you make better financial decisions and get your credit on a good path. Contact one of our loan officers today for help at 801-399-9728