5 Credit Score Hacks That Can Raise You to a Perfect Score
Unless your credit score is perfect, chances are you’d like to see it improve. Whether your credit score is good, mediocre, or bad, there’s room for improvement.
However, many people have no idea how to work towards a better credit score and most don’t realize there are simple things that they can do to help it get better.
There are many credit score hacks that you can apply to help improve your credit score. By applying several of them over time, you will be amazed by the increase you will soon see.
Read on to learn some credit score tips and tricks that will reward you with a better credit score in no time. It’s easier than you might think.
What Is a Credit Score, Anyway?
You have surely heard about credit scores and you may have even looked up your own. However, you may not fully understand what a credit score is or how one is calculated, and you might not know how good or bad your number actually is.
A credit score is a number that ranges from 300 to 850. Although it’s just a number, it depicts your creditworthiness based on your past credit history.
This number tells lenders how likely you are to repay loans in an efficient and timely manner. Then, based on that number, they can decide whether or not they want to lend you money or issue you a credit card.
A number of factors go into the calculation of credit scores. The number of open accounts you have, the amount of debt you currently carry, and the overall repayment history of your debts all play a part.
The better your credit score, the better chance you have of getting loans, of being issued new credit cards, and of getting a reasonable interest rate on the money you borrow or on financing for big purchases like buying a new car or a home.
The primary scoring system is FICO. This system is universal and is based on the credit score model created by the Fair Isaac Corporation in 1956. There are other methods of determining credit scores, but FICO is the most commonly used nationwide.
What Is a Good Credit Score?
A credit score of 700 or above is considered good, and a score above 800 is ranked as excellent. According to FICO, the average credit score for Americans in 2019 was 706 – an all-time high for this measurement.
However, there are many people out there who possess credit scores that are far below average. If yours is well below 700, you are not alone. Nearly a third of Americans have a fair or poor credit score.
Fortunately, credit scores are fluid numbers. Just because you have a poor credit score right now does not mean you are stuck with one for life.
Credit Score Hacks to Try
There are so many different credit score hacks that you can use to improve your credit score. If you try just one or two of these, you will see some increase; if you put them all into practice, your score will improve by leaps and bounds.
1. Pay On Time
One reason your credit score may be low to begin with is that you have missed payments or have paid your bills late. Even a few missed or late payments can have a negative effect on your score. One of the easiest ways to improve your credit is to avoid doing this ever again.
Not long ago, to pay a credit card bill, we had to write a check and send it in. As a result, many payments were late or were forgotten altogether. It’s much easier to pay on time these days; you can set up automatic bill pay so at least the minimum is paid on or before your due date through a transfer from your bank.
2. Pay Down Your Balances
If your credit cards are maxed out, or if you are using the majority of your available credit, your credit score will suffer. In fact, many experts say that if you are using more than 30% of your available credit, you’re using too much. People with the highest credit scores use under 10% of their available credit.
By paying down your balances, you will show lenders that you are responsible, and your credit score will improve in turn.
This is easier said than done, but you can do it. Instead of paying your credit card bills once a month, consider making weekly payments until your total credit is at a manageable amount.
3. Request an Increase to Your Credit Limit
If you call your lenders and ask for an increase in your credit limit, they will likely grant it. They think you will spend more money – but do the opposite. This is another way to lower your credit-to-debt ratio, which will improve your credit score.
However, you must be strong; just because you now have more credit, don’t be tempted to use it. That will get you in more hot water.
4. Don’t Close Out Old Credit Cards
You may have a lot of credit cards, and in trying to improve your credit score, it may be tempting to close out some of them. This might not be a good idea, though; if you have had some of them for a long time and have paid them down to zero, it demonstrates that you have a history of being responsible with debt. This will contribute to a better credit score down the road.
5. Just Wait
Everyone would love to see an improvement in their credit score overnight, but it doesn’t work that way. If you stick to the above tips and give it some time, you will have a better credit score in time. Be patient and stay the course, and positive results will soon follow.
More Help Is Available If You Need It
If you have tried all of the above credit score hacks and it seems that your bad credit score just won’t budge, you may need to reach out for professional help.
US Allied Financial offers credit repair assistance and works to help people achieve better credit scores every day. We would love to help you, too. Give us a call today. We look forward to hearing from you soon.