Your credit score is one of those things that seems easy to ruin and impossible to build back up. Just having one bad month or one small rough patch can be enough to knock your score down low enough that it seems too demoralizing to even try and start to fix the situation. However, with a good credit score being so important in life, it is essential that you do all you can to stay on top of the problem. After all, if you give up and accept defeat with a low credit score, you will spend the rest of your life not being able to get credit cards, a mortgage, finance, and a whole host of other things. Therefore, because it is so important, and does seem so stressful to maintain we have put together a guide of the 9 smart moves that’ll help you raise your credit score, and put you back on the right track.
1. Don’t Cut Up All Your Cards
It might seem like a good idea to get rid of your credit cards altogether, but it’s not. Ideally, if you have more than one, work on paying off the others, and sticking with one card. This way you are not tempted to overspend frequently from multiple sources, but by using the one card and paying it off over and over, you are building up your score each time.
Another alternative is by using 0% interest credit cards in order to maximize the use of credit while not paying interests on it.
2. Increase Your Limit
If possible, call your company and ask for an increase in your limit, you don’t have to use the extra money now available, but you can build up your score quicker the higher your limit is since you are deemed more financially responsible.
3. Don’t Pay One Debt with Another
Don’t use a credit card to pay off a loan, don’t use a loan to pay off a different debt and so on. Focus on the debt at hand, and work at paying it off without taking out credit from another source to cover it. You can even call the debt collection agency and set up a payment plan in exchange for them stopping any recurring charges.
4. Become an Authorized User
This one might be a little tricky as it involves essentially jumping on the back of the credit score of someone you know. This is a good step to take if you don’t have much credit history, or don’t currently have much opportunity to build it up. You can be added as an authorized user on another person’s account and use their credit score as a guarantee to credit companies.
5. Don’t Leave Cards to Become Inactive
If you atop using a credit card, even if there is zero balance, eventually it will be canceled due to inactivity. Don’t let this happen, even if you’re just spending a little and paying it off immediately, keep the card in use.
6. Don’t Worry About the Past
If you were in a lot of financial trouble previously, don’t focus on it. Don’t let how you dealt with money in the past, dictate how you deal with money in the future. You may have made mistakes previously or were in impossible situations, but you have to pick yourself up and stay motivated at fixing the problem no matter how long it takes.
7. Keep Track of Spending
You know how you panic a little when you receive an alert from your cell provider warning you that you only have 20% of your data left, well you need to feel the same about your credit card balance. You can set up alerts to notify you when you are 20% away from your limit, or you can keep track manually and make a note of it yourself. Either way, once you hit that mark, stop spending, do everything you can to start paying off the card and don’t use it until you have made some payments.
8. Ask for Help
If you have a long and positive overall relationship with your credit card company, it is possible to reach out and ask for help. This can be asking them to wipe off late payment fees until you can catch up, or freezing the card until you can get your finances in order. Credit companies are there to make money, but they will often compromise in certain situations to help people out.
9. Check Your Credit Score is Correct
There are three main companies that have the information for your credit score – Equifax, TransUnion, and Experian. It is a good idea to log on and check your score on each one, make sure they all match and are all accurate as far as you are aware, and your personal information is correct. It is estimated that around 20% of people have an error of their credit report, that is is affecting their score. If you notice a discrepancy and believe your score is being unfairly pushed down because of it, you can report it to the companies. All three are individual companies so you will have to make separate complaints. But start the investigation with them, and see if your score can be rectified.
It can seem like there is a long road ahead at times, but everything you can do to help your score will go a long way in helping you have a better financial future.