Ways To Boost Your Credit Score
How to boost your credit score in 2023. Download Xare to manage your money.
Got big financial plans for 2023? They may include buying a home or a car. Maybe you want to jet off to travel for a year. Building your credit score is a vital piece of these plans you may not have considered. A better credit score can expand your access to credit and make borrowing more affordable. So what can you do to get your score in shape? Here are a few ways to boost credit in the new year.
1. Get rid of that pesky holiday balance
After the holiday festivities, you may be stuck with a pending balance from your family trip or the huge bash you threw for your entire family. This is in addition to regular bills. Refrain from carrying over substantial payments into the new year, which could negatively affect your credit score. Timely payment history and the amount of credit you utilize are the two main factors that affect your credit score. So, plan out your expenses this holiday season and make sure you can budget for repayment.
2. Applying for credit too often? That's a red flag
Applying for new credit too often in a short period can raise a red flag. Your credit card will make a hard inquiry with every new credit application in a short period, negatively impacting your score. The credit scoring model views several credit applications near time as desperation. This leads to lenders viewing you as a risk and rejecting your application. Plan your credit applications and space them out adequately. Think carefully before making a decision involving credit.
3. What if your credit limit was just a little bit higher?
Request issuers to increase your credit limits on existing accounts. Higher limits will lower your utilization and frequency of applying for credit. If you stick to a budget, an increased credit limit will make your daily spending more comfortable. Experts recommend keeping your utilization under 30% of your limit to build your score.
4. Make rent and utility payments count
Most credit scoring models do not factor rent or utility payments into your score, as this information usually is not on your reports. However, to build a credit history, there are services you can use to manually report timely payments and add them to your reports. Excess fees should also be monitored and reported to build credit.
5. Keeping up with credit reports
Credit reports contain in formation about your credit history. Keeping up with your reports is critical because scoring companies use them to calculate your scores. If a report error is dragging your score down, such as a reported late payment that you actually paid on time, ensure that you discuss a correction with the pertinent credit bureau. Credit reports often intimidate people, as they may seem excessive and long. Teach yourself how to efficiently read a credit report, and once you get used to it, it's all smooth sailing from there!
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