Building a solid credit score takes time and effort, but there are a few things you can do to give your credit score a quick boost. But be careful… sometimes people share credit score tricks that are dishonest (even bordering on illegal) or can end up causing you trouble later on.
Below are my three favorite credit-boosting tips. They are simple, legal, and worry free!
Credit Boosting Tip #1
Become an authorized user on a family member’s credit card. For maximum effect, this person must have an excellent payment record and long payment history. If you’ve had a checkered past with your own credit cards, this may be a tough sell. But, you don’t ever have to have an actual card or use the account for this to work! The benefit is in associating yourself with the other person’s excellent track record. Their good habits will now reflect positively on your credit record, giving your credit score a much needed a boost.
Credit Boosting Tip #2
Make 2 payments a month to your credit card. The timing of these payments is important. Split your regular payment in half and pay one half right BEFORE the statement end date and the other BEFORE the payment due date. The first payment lowers the balance the credit card company reports to the credit reporting companies (which can improve your FICO score) and the second keeps your payment on time and current.
You get two added bonuses with this tip… 1) You’ll pay a little less interest each month because of how the split payments lower your balance before the statement end date. 2) You’ll pay down your balances faster if you stick to your two-payment-a-month schedule, so you’ll save a considerable amount of money over the long run.
Credit Boosting Tip #3
If you come in to a bit of cash (like from a bonus at work or a tax refund) the best debt to pay down is your car loan or student loan. Debts like these are called installment loans and are an important part of your credit mix. These types of loans usually have a high initial balance, so when the current balance on them is very low, it can give your FICO score a big boost.
Here’s the trick – DON’T pay it all off at once! Go ahead and make a fat payment before that extra cash slips through your fingers, but leave about a $100 balance for next month. When the very low balance on your installment loan posts to your credit file, your FICO score will make a nice jump. This is the perfect time to apply for a new credit card with a better interest rate or for a home mortgage. But, move fast. Once that installment loan is at a zero balance, it no longer goes into the FICO calculation.
Giving your credit score a quick boost really can be this simple! If you need more advice or have additional questions, please contact us any time.
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