Increasing or improving your credit score is always a smart idea, for many reasons. For one, having a high credit score means you have better chances of getting approved for a credit card application, business loan, or home mortgage. Creditors will also trust you enough to raise your credit on loans and credit cards, and you can get the best interest rates.
If you’re looking to rent an apartment or home in Utah, your credit score will help you get approved by most landlords. Some phone companies will even waive the security deposit for a new phone contract if they see that you have good credit.
So how can you increase your credit score? Here are a few suggestions.
1. Pay Off Maxed Out Credit Cards
One or more maxed-out credit cards raises red flags on your credit score. Be sure your credit cards aren’t close to the credit limit and prioritize paying those cards if they are.
2. Pay Twice in a Billing Cycle
Whatever is due once a month—water, power, credit cards—you may opt to pay for it every two weeks if you have the extra money to do so. This doesn’t mean splitting the bill into two installments. It means advancing payment, in effect, making two payments per month instead of one for a once-a-month bill.
3. Check Your Credit Report
A good way to see if your credit score is healthy is by requesting for a credit report. This is useful when you’re planning to borrow money, such as getting a home loan in Utah. You’re entitled to a free credit report annually from each of the three reporting agencies. Doing so doesn’t affect your credit score one bit, so it’s wise to take advantage of this benefit to know where you stand. This is also a good opportunity to spot any errors in your credit, or make sure that you’re not a victim of identity theft.
4 .Pay Bills on Time
A very simple way to increase your credit score is to constantly demonstrate your ability to pay. Do this by paying on time, every time. So, never miss a payment for any of your bills by setting up a payment schedule. Create reminders or alarms on your phone or in a weekly/monthly planner.
5. Get in Touch with Your Creditors
If you miss a payment or know that you might miss a payment to your credit card, leasing or mortgage company, call them up to set up a payment plan. Some creditors may give you a grace period and won’t hit you with penalty fees if you contact them personally.
6. Keep Unused Credit Cards Open
Your credit score relies heavily on your credit history. If you have established a good reputation for paying your balances on an old credit card, don’t close it even if you haven’t been using it. Close newer accounts instead and revert to the old accounts where you have a longer history and better credit.
7. Get a Small Loan
Your last resort for upping your credit score, if the other ways are impossible, is to get an affordable loan. A small loan of $250 to $1000 that’s quickly paid off can reflect positively on your record and increase your credit score to a small degree.
These are some strategies you can use to get a better credit score. It’s not that difficult to increase your score, especially if you know how to handle your finances. You should use the classic strategies of using any credit available to you judiciously and budget your money wisely.