Your credit score is essential when it comes time to buy a home or a new car. Unfortunately, a low credit score negatively impacts your buying power.
Take a look at these four surprising tips that will help you rebuild your credit score and win back your buying power.
1. Pay More Than Your Minimum Payment
Paying only the minimum credit on your card is a waste of money since most of it will go towards interest, especially if your balance is high. Paying a more massive chunk of your balance will bring down your balance faster.
Plus, if you pay by your credit report date instead of your due date, that will reflect well on your report. If your card has a lower balance on your report date, you’ll see a boost to your credit sooner than if you paid on your due date.
If you have a significant balance, a no credit check loan helps pay a big portion of it right away. Be sure to learn more about what it is and how it can help.
2. Don’t Close Old Credit Cards
The age of your accounts is a significant factor that impacts your credit score. The older your accounts, the better it looks to creditors. Old age accounts indicate good standing and loyalty, while young accounts are hard to trust.
Closing old accounts remove credit utilization and limits, which negatively impacts your score. Keeping your accounts open, even if you don’t use them much, is better than closing them.
3. Become an Authorized User
Becoming an authorized user of someone else’s credit card is a quick and simple way to boost your credit score. As long as the other user has a low balance, their card usage will reflect on your score.
This option is great for students or those who don’t have a credit history. While you don’t need to use or pay off the card, working together to make payments encourages healthy credit habits.
4. Ask for a Credit Line Increase
If you’ve recently gained a raise or promotion at work, now is the time to ask for a higher credit line. This is a great way to increase your credit score without putting extra money towards your balance.
With an increased credit score, your buying power goes up. If you’re using less than 30% of your limit, this will reflect well on your overall score. Increasing your limit helps bump that percentage down, making it look like your balance isn’t creeping towards your limit anymore.
5. Dispute Credit Report Errors
It’s vital to keep a close eye on your credit report, which you can get for free every twelve months. Credit report errors lower your score when you don’t deserve it. Factors like fraudulent accounts and identity theft may wreck your score for a long time if they happen without you noticing.
If you notice a mistake on your report, you should dispute it immediately. The three major credit bureaus investigate your case and decide whether or not your report has an error. If your report has an error, your credit score will rise back up.
Rebuild Your Credit Score With Ease
Putting in the effort to rebuild your credit score takes patience, but these efforts will pay off. With the help of these four tips, you’re well on your way toward better credit.
If you enjoyed this post, check out the rest of our blog for more tips.