5 tips to boost your credit score fast
What's the story
Improving your credit score can unlock doors to better financial opportunities, from lower interest rates on loans and credit cards to increased chances of even getting a job.
Although boosting your credit score may appear challenging, there are some practical steps you could take to see improvements in no time.
Here are five actionable strategies that can boost your credit score fast.
Timely payments
Pay bills on time
Consistently paying your bills by their due dates is paramount to maintaining and improving your credit score.
Payment history constitutes 35% of your FICO score, making it the biggest factor.
Set up reminders/automatic payments to ensure you never miss a deadline.
Even one missed payment can have an adverse effect on your score, so focus on timely payments to see positive changes.
Debt reduction
Reduce outstanding debt
Lowering the amount of debt you owe is another effective way to boost your credit score quickly.
Pay down high-interest debts first (while making minimum payments on others).
Keep your credit utilization ratio below 30%, as it accounts for 30% of your FICO score.
Reducing outstanding balances not only improves this ratio but also reflects positively on lenders.
Limit inquiries
Avoid new credit applications
Every time you seek new credit, a hard inquiry is noted on your report, which can affect your score by a few points temporarily.
To keep your standing as it is or improve it, refrain from applying for new lines of credit unless it's the last resort.
Several inquiries in a short span may indicate financial instability to lenders.
Regular monitoring
Check credit reports regularly
Regularly reviewing your credit reports also helps flag errors that could be pulling your score down.
Get free copies from major bureaus, and look for inaccuracies such as incorrect personal information or unauthorized accounts.
Dispute any errors immediately with the respective bureau to ensure they don't affect your rating negatively.
Higher limits
Increase available credit limits
Requesting an increase in existing credit limits (without raising spending levels) can improve the utilization ratio significantly—an essential component of calculating scores effectively at 30%.
Contact creditors about increasing limits, however, ensure responsible usage afterward.
This is to not accumulate more debt than manageable over time through increased access alone.