How to Raise Your Credit Score

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Contributor, Benzinga
November 10, 2021

Your credit score is part of a much larger financial identity you keep every day. Unfortunately, you only have so much control over your credit score. The 3 credit bureaus report your balance of payments, debts and obligations. You can raise your credit score using the tips below, keeping in mind, of course, that this is generally a lengthy process you must maintain long after you’ve repaired your credit. 

Why Work on Your Credit Score?

Your credit score is a vital part of your existence. Unless you plan to live in the hills and harvest fruit you sell at a roadside stand or whittle little forest animals from tree branches — both noble pursuits, indeed — you need a good credit score.

Your credit score can determine:

  • Employment
  • Where you can live
  • Whether you can purchase a car
  • Where you can attend college
  • How much large purchases will cost

Remember, your credit is screened when you apply for an apartment, and even private renters might check your credit. You can’t buy an affordable car if you cannot obtain financing. Employers check credit in certain industries. 

Plus, many things just cost more. Those special rates you see advertised on TV are meant for people with outstanding credit. For example, you might have the opportunity to buy a car, but a low credit score results in a high interest rate, causing your monthly payment to rise.

Moreover, you may experience difficulty obtaining student loans. It may be difficult to take out loans for additional expenses, or you may not have the type of credit that would allow you to obtain loans for expensive post-graduate programs. 

How to Raise Your Credit Score

Raising your credit score is a long-term process that you must attend to consistently. Use these tips to raise your credit score and ensure that it remains healthy for many years to come. 

Check Your Credit Report

Review your credit report, looking for signs of incorrect information. When you find incorrect information, dispute that data via the credit bureau. 

If you uncover fraud, ensure that you point that out to the credit bureau as soon as possible.

At times, you may have legitimate items on your credit report that you simply forgot about or missed. Because items on your credit report fall off after 7 years when they are unpaid, you should consider whether you want to pay now or wait until the item drops from your report. 

Finally, you should ensure that each reported line of credit is accurate. The report may look correct, but there are times when late or on-time payments are reported improperly. Simple mistakes like this can adversely impact your credit. 

Pay Bills on Time

The best credit habit you can keep is paying your debts on time. If you have issues with paying certain bills on time, you should reach out to the creditor to learn about any grace period that is available to you. For example, you may not get paid on the day that your pay period ends. However, you must pay your mortgage on time. Reach out to the mortgage lender to learn how long their grace period is. You might have 5, 10, 15 days or more. 

Additionally, you may want to adjust your payment dates (whenever possible) to make them easier to manage. 

Go for 30% Credit Utilization

While there is no magic number that will improve your credit score faster, you should look for a credit use percentage of about 30. Take a look at each card or line of credit, try not to carry a balance of more than 30% of the total available credit and pay down those balances as much as possible. 

Keep Credit Inquiries Down

Keeping credit inquiries down ensures that you are not inadvertently harming your credit. When you seek financing or credit cards, look for companies that complete “soft” inquiries that do not affect your credit score. Be sure you only request a hard inquiry into your credit when you have no other options, or you are certain you’ll be approved.

Add to Your Credit Report

You can add to your credit report with a credit builder loan or credit card. In these cases, you can access small amounts of cash or spending power that report to the credit bureau. These are excellent products that can help those with little to no credit. If you’re planning to rebuild your credit, you can use these loans or cards to raise your score enough to access other types of financing in the future.

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Source: MoneyLion

Keep Old Accounts Open

When you pay off credit cards or lines of credit, do not close them. One of the mistakes many consumers make is closing lines of credit when they’re paid off. Your credit score could drop if you have fewer lines of credit. Instead, you should try to use these accounts infrequently, paying them off as soon as possible to demonstrate that you can responsibly use credit over longer periods. 

Consider Debt Consolidation

You may choose to consolidate your debts. These services often pay off debts and/or negotiate your balances. Remember, there are times when debt consolidation allows you to pay off your debts for less money, but your credit may suffer. Ask the credit resolution firm how it helps you pay off each card or loan, how balances are negotiated, how these obligations are paid off and what the outlook for your credit score is. 

Try Credit Monitoring

You can register to monitor your credit through several different services. Also, you may uncover various credit-focused programs that allow you to monitor your credit report while also accessing cash, using credit, etc. Look for programs, companies or services that help you look at the big picture of your credit rather than simply promising results. 

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Along with these features, you can work with MoneyLion to simply store your money, grow your net worth and plan for the future. All of this keeps with MoneyLion’s promise to help the “99% feel 100%” about their finances. 

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Source: MoneyLion

Raise Your Credit Score and Establish Good Habits

While you work to raise your credit score, remember that you must maintain good credit habits going forward. You can take an even greater hold on your finances by researching with Benzinga and learning more about stocks, financial instruments, personal finances and much more. 

Frequently Asked Questions

Q

How can I raise my credit score in 30 days?

A

Raising your credit score in 30 days is possible, but you must take a few steps to push your credit higher. Dispute incorrect or fraudulent transactions. Pay off as much debt as possible. Reduce your overall use. While some companies report to the credit bureaus slower than others, this is a good first step for you as a consumer.

Q

How can I raise my credit score in a week?

A

You can raise your credit score in a week by becoming an authorized user on a credit card with a good use and payment history. Pay off as much debt as you can. Take out a credit-building loan or register for a credit-building card. You will see your score start to tick up slowly, and you can maintain good credit habits to raise your score even more in the future.