How to Boost Credit in a Few Steps

The credit system has its roots in 1950s America. A mathemetician named Ear Isaac worked with an engineer called Bill Fair to devise a credit scoring system that was impartial.

Nowadays, we are all familiar with the credit scoring system, and many of us know how difficult it can be to move forward in life when our credit score isn’t at its best. Yet, it may be easier than you think to boost your credit score.

In this guide, we’ll run you through how to boost credit in just a few steps. Take note of these steps and commit to them. With a bit of focus and consistency, you’ll be well on your way to boosting your credit score. Then you’ll be able to purchase the things you need to advance your ambitions and standard of living.

Pay Down Revolving Credit Balances

The first step you should commit to is to start paying down your revolving credit balances. And, if you have more available funds to pay the required amount, pay them down too.

The idea is that you will start to chip away at your debt. And if you do this over a few months, you’ll be surprised how much your credit score can improve.

Just make sure that form a habit of paying as much as you can for each evolving credit balance. It’s no use improving your credit score for a few months and then slipping back into old habits.

Keep in mind that different creditors will report your paid amount and balance to the consumer’s credit report at different times. For instance, some creditors may report your balance after a few days of payment, while others have set dates when they make their reports.

A good tip is to contact your creditors and ask them when they do their reporting. This way you might be able to time your payments just before they report and boost your credit score quicker.

Also, don’t rule out making multiple payments inside a particular month if you can manage it. In the end, the sooner you drive down that balance, the more opportunities you’ll have with a better credit score.

Try to Increase Your Credit Limit

it might sound counterintuitive, however, by increasing your credit limit you lower your credit utilization ratio. And just so you know, this ratio is the amount of revolving credit you have divided by the total amount of revolving credit that you can use.

By increasing your credit utilization ratio, you can improve your credit score pretty quickly. The key though is to not start using the credit that you’ve gained, or you defeat the object of what you want to achieve, which is improving credit.

There are two ways of knowing how to build credit in this manner. Either you ask your current creditors for an increase. Or, you can approach another creditor and get new credit with them.

If you do want to find a new creditor, make sure you do thorough research beforehand. You should aim to only apply one time for a new credit card. The reason for this is every application you make for new credit will be factored in negatively in your credit score.

However, don’t let a few point deductions deter you from increasing your credit limit. In the long run, it will be worth it if you stick to the plan of paying down revolving credit balances in a healthy manner.

Here is a solid example of a reputable creditor for people under the age of thirty: https://www.moneyunder30.com/credit-cards. We recommend you check them out if you are wanting to increase your credit limit within that demographic.

Check Credit Reports for Errors

There may be many occasions where there are errors on your credit report that will impact your credit score in a negative way. Therefore, form a habit to always check your credit reports with scrutiny.

If you do find any errors, it’s then in your interest to try and dispute them. Then, if the creditor accepts your dispute, they will wipe it off your report which will raise your credit score.

But what sort of errors should you be looking for? Well, typical errors include duplicated accounts, fraud, and payments that have been misreported. Don’t expect your credit company to get all their paperwork one hundred percent right all the time. You need to take charge of your credit and make sure they are handling it right for your benefit.

Remove Paid Off Negative Entries

Another way of building credit is to ask to have any paid-off negative entries on your credit report removed. If you can get a load of old late payments that you made ages ago struck off your report, your credit score should improve.

Also, you may have old collection accounts that you paid off years ago still showing up on your report. Ask them to be removed also.

Yes, it may take a little bit of effort and time on your part to contact the collections agency and run through all of this procedure. However, all this effort will be paid off when you manage to get your credit report clean and up-to-date.

The best scenario is that you don’t just get the collection agency to show an account paid off, but to actually wipe it clean from your report. And we should mention that collection agencies or debt buyers are the best to approach with this tactic.

Original creditors tend to be a bit unforthcoming when you approach them about striking off negative entries. Yet, they still may be worth a try as a last resort.

Consider Becoming an Authorized User

Another way to improve your credit score is to become an authorized user. You can only do this, though, if you have a friend or family member willing to help you out.

What Is an authorized user? It’s when you become authorized to use a friend or relative’s credit card in an official capacity. You’ll even have a credit card issued to the original user, but with your name on it!

However, the idea is that you never use that card or even see it. Instead, you’re playing the system here a little and reaping the benefits of your friend or relative’s good credit.

And so the person’s credit you wish to become authorized to use must be good. In fact, the better credit score that person has, the more credit utilization ratio you will gain.

If you’re wondering how to approach someone about this, let them read this section of the article. Explain that it is just a formality that can help you build credit. They will never need to let you know their card number, nor give you the card that’s issued in your name.

Furthermore, they can cancel your authorized user status at any time, so they’re not tied in. And, you becoming an authorized user on their credit facility won’t affect their credit score in any way.

Another tip on this point is that you should make sure that the other person’s credit card reports to the three most significant credit bureaus. Those bureaus are Experian, TransUnion, and Equifax.

Also, if you are wondering how quickly this change in your credit will appear on your report, it’ll be fast. As soon as you are officially an authorized user, and your credit account is reported to the bureaus mentioned, you should see the results.

Get a Secured Credit Card

What’s a secured credit card? It’s a credit card that you secure with cash to deposit. A typical cash deposit amount may be the credit limit you are asking for.

Of course, you will need to have quite a large sum of cash handy to improve your credit in this manner. But by doing this, you can start using the card, making payments on time, and begin to build your credit.

This is a good way of building credit if you don’t have such a good credit history. Where other creditors might not let you have a credit card, creditors that offer a secured option will. Plus, it will also improve your credit utilization ratio, if you have other forms of credit.

Again, you must check that the creditors that offer you such a card report to all the most significant bureaus that we stated earlier. And with this method of building credit, you should be aiming to improve your score over a period of several months.

How to Boost Credit the Right Way

Now you have a handful of proven steps and tips to take away if you were wondering how to boost credit. The other most crucial advice we can offer is you ensure to pay off your minimum balance, at the very least, on time.

So thanks for reading through this advice, and good luck! Also, if you want more info on this topic, please check out our blog.