10 Ways To Boost Your Credit Score

When buying real estate, your credit score plays a significant role in the mortgage financing you'll get.

Your credit score defines your options, interest rate, mortgage insurance, and even your homeowner's insurance premiums.
A lower credit score can also mean higher costs on everyday items, like auto loans, credit cards, auto insurance, and home rental agreements.  It can also influence whether you're
hired for specific jobs or not.

This is because it talks about your financial discipline, how responsible you are with money, and, therefore, how trustworthy you can be.

Here are 10 tips to boost and maintain the highest credit score possible:

1. Pay Credit Card Balances Strategically
   1. Action: Aim to use less than 30% of your credit limit on your credit cards — under 10% is
      even better. For example, with a $1,000 limit, keep the balance below $300 (or under
      $100). Lowering the balance on even one card can boost your credit score.
   2. Why: Credit bureaus (the companies that track your credit) see how much of your credit
      you use. If you use too much, it can hurt your score.
   3. How: Pay your balance before the billing cycle ends, or make small monthly payments to keep your balance low. This will show the bureaus that you’re
      using your credit responsibly.
   4. Bonus Tip: A small balance on a card can be better for your score than no balance
2. Request Higher Credit Limits
   1. Action: Ask your credit card company to raise your credit limit. If they say yes, your available credit goes up.
   2. Why: When you have more credit available and don’t increase your balances, it lowers the percentage of credit you’re using, which can boost your score.
   3. How: Call or log in to your credit card account online and request a credit limit increase. It’s important NOT to spend more just because you have a higher limit.
3. Become an Authorized UserAction:
   1. Ask a family member or friend with good credit to add you as an authorized user on their card.
   2. Why: Authorizing users lets you "borrow" their positive credit history. Even if you don’t use the card, their good payment history can help your credit score.
   3. How: Talk with someone you trust who has good credit and ask them to add you to their card. Make sure their credit card reports to all three major credit bureaus.
      (Equifax, Experian, and TransUnion).
   4. Bonus Tip: A card with a $5,000+ limit open for 5+ years will give you the best boost. Ensure the card has little to no balance, as payments will count against
      your debt
4. Use a Secured Credit CardAction:
   1. A secured credit card requires a deposit that becomes your credit limit. You can use it like a regular credit card and pay your balance on time.
   2. Why: A secured card is a good way to build or rebuild your credit because it reports to the credit bureaus and helps you show a good payment history.
   3. How: Apply for a secured credit card through a bank or credit card company. Once you have it, use it wisely, keep the balance low, and always pay on time.
   4. Bonus Tip: Discover and Capital One are top choices for secured cards. Get the highest limit you can and pay down your balance multiple times a month to keep it below 30% of
      your limit.
5. Get Credit for Rent and Utility PaymentAction:
   1. Sign up for a service that reports your rent or utility payments to the credit bureaus. 
   2. Why: Most rent and utility payments don’t appear on your credit report, but if you get them reported, they can help improve your credit.
   3. How: Some companies will report your rent and utility payments to the credit bureaus.
   4. You can also use Experian Boost to report utility payments, streaming
      services, and phone bills
6. Add to Your Credit Mix
   1. Action: Open a new type of credit you don’t already have, like a loan if you only have credit cards or a credit card if you only have loans.
   2. Why: Credit bureaus like to see that you can handle different types of credit. Adding another type of credit can improve your score.
   3. How: If you don’t have many credit cards, consider getting a new one. You could look into a credit-builder loan if you don't have loans. Just make sure that the account reports to
      all three credit bureaus
7. Pay Bills on Time
   1. Action: Always pay your bills by their due date. You can set reminders or automatic payments to help with this.
   2. Why: Paying bills late is one of the worst things you can do to your credit. Late payments stay on your credit report for up to seven years, hurting your score significantly.
   3. How: If you miss a payment, pay it as soon as possible, and then call the company to see if they will stop reporting it as late. Even if they won’t, bringing your account current will
      help your credit over time.
8. Dispute Credit Report Errors
   1. Action: Review your credit reports carefully and check for any mistakes, like a late payment that isn’t yours or incorrect information. If you find an error, dispute it with the credit bureau.
   2. Why: Errors on your credit report can unfairly lower your score. Fixing these mistakes can give your credit a quick boost. 
   3. How: You can request free credit reports from the three major credit bureaus once a year at AnnualCreditReport.com. Look for errors and follow the bureau’s instructions to
      dispute them.
9. Handle Collections Accounts
   1. Action: If you have any accounts in collections (debts you haven’t paid that a company sent to a collections agency), pay them off or dispute them if incorrect.
   2. Why: Accounts in collections are a serious negative mark on your credit report. Paying them off or getting them removed can help your score.
   3. How: Get a copy of your credit report, find any collections accounts, and contact the collections agency. Ask if they’ll stop reporting the debt after you pay it. In some cases, you can dispute the debt if it’s incorrect.
10. Hire a Credit ExperAction:
    1. Consider hiring a credit expert if your credit score is below 600 or you have issues like charge-offs, bankruptcy, judgments, collections, or serious late payments.
    2. Why: A strong credit score comes from a good credit history and active, current accounts. A credit expert can help resolve past issues and find new credit sources, speeding up your progress.
    3. How: Get a referral from a trusted financial advisor or real estate professional. Be cautious about hiring credit experts online.