How to Boost Your Credit Score


Your credit score is the most important factor on most loan applications. It determines whether you are approved for a loan (mortgage, car, personal, credit card) and if so, the rate at which you can borrow money. A small difference in credit score can end up costing or saving you thousands of dollars.

It may seem daunting to think about improving your credit score, since it can take years to build up. However, the good news is that if you do have a lower credit score,  it is much easier to raise it than if your score is already relatively high. If your credit score is high, it is still extremely important to be aware of the factors that affect your score. 

Of course, there are no overnight solutions but there are simple steps you can take to get your credit score moving in the right direction. Here are some of the fastest way to improve your credit score:

  1. Check your score! First, you should know and continuously check your credit score. and will both show you your score without impacting your score.

  2. Make sure there are no errors or mistakes on your credit report. According to the Federal Trade Commission, 5% of consumers have had lending rates negatively impacted by errors on their credit report. 25% of people have negative errors on their report. An error can be anything from an incorrect collections account to a late payment report. Negative marks will harm your credit score. All credit report bureaus (Equifax, Experian, and TransUnion) have online portals where you can process disputes. The bureaus are required by law to respond to a dispute within 30 days after it is filed.

  3. Get your credit card balances as low as possible from your credit limit. In order to keep your credit utilization percentage as low as possible, considering asking your credit card companies to increase your credit limit. This isn’t a reason to put more of a balance on your card. The purpose is to boost your credit score!  If you consolidate your credit card debts into a personal loan (only if you can get a rate lower than your credit card rate), this will also improve your score. You can also spread debt and spending across all credit cards, so no one balance is too close to your credit limit. If you want to avoid drops in your credit score near due dates due to utilization rates, consider paying your cards off throughout the month instead of once a month at the due date.

  4. Stay up to date with payments! A missed payment can drop a credit report by as much as 100 points. Get past due accounts up to date as quickly as possible. As a preventative measure, set up automatic payments to all loans, and make sure to pay bills as quickly as possible.

  5. Keep accounts active and open. It may be tempting to close that one credit card account that has an annual fee, but the age of an account and the length of payment history boosts credit score.

  6. Become an authorized user on another person’s credit card. This can help improve your score if that person has a perfect payment history and low credit utilization rate. However, it may be difficult to find someone who is willing to add you as a user.

  7. If possible, negotiate with creditors. Ask creditors to remove marks from reports in exchange for paying a balance in full, or even just ask if the marks are small blips on an otherwise perfect score. It can't hurt to ask and it could improve your score.

  8. Consider using Perpay for certain purchases. While Perpay does not pull your credit score or report to the Credit Bureau, it's a great alternative to credit card purchasing. Rather than add to credit card debt, make small, easy, and automatic payments over time directly from your paycheck. Your activity and payment history can increase your Spending Limit over time.

Always use caution when doing anything that can impact your credit score and know that through diligence and hard work, improving your credit score is possible!