It’s probably no secret, but our society today kind runs on credit. Whether it’s credit cards (and all the points), getting a car loan, mortgage or paying for school, debt is very much a part of our everyday life. It’s probably also not a secret that having a good credit score can save you thousands of dollars on interest, down payments, and insurance rates? A good credit score can also result in approvals for loans, housing, and credit cards. Fortunately, if you have less-than-perfect credit, there are some tips and tricks you can use to improve your credit score!

As a reminder, your credit score is made up of the following factors: your credit history (i.e. how long you’ve had credit), your utilization ratio (how much of your credit you actually use), the types of credit, your payment history, and new credit that’s been issued to you. Of these 5 factors, 65% of your score is based on your payment history and your credit utilization. So, with that in mind, let’s explore a few ways to improve your credit score (both quickly and over time).

Pay Loans On Time

Probably a no brainer, but to appear attractive from a credit standpoint, lenders want to know you’ll be trustworthy to pay them back. Installment loans, such as auto loans or student loans, affect your credit based on the payment history of the loan instead of the amount of the loan. For this reason, late or skipped payments on an installment loan will have a significant negative effect on your credit score.

Make sure you are paying your installment loans on time and in full every month for the best result. Pay the minimum by the due date each month. This is also a great tip for how to get an 850 credit score.

Become an Authorized User

A simple credit report hack is to become an authorized user on the account of a person with excellent credit history. By becoming an authorized user, the account and the payment history will be added to your credit report, and potentially give you a boost to your credit score. 

Becoming an authorized user is a great way to add a positive account to your credit report. Of course the person adding you has to agree to it – and be sure to not mess up their credit by acting foolishly with their money!

Optimize Your Credit Utilization Ratio

One of the best tips for how to get a better credit score is to optimize your credit utilization ratio. Your credit utilization is calculated on the amount of credit you have available vs. the amount of credit you have used. So, if the total amounts lent to you (think credit card limits) is $1,000 and you routinely use or carry a balance of $500, your credit utilization limit is 50%. The lower the better, as lenders want to a) know you’re trustworthy to have had others extend you credit but b) not stretched too thin because you’re so in debt already. If your utilization ratio is higher than 30%, your credit score will be negatively affected. 

Another trick is to simply call and ask your lenders (most likely credit cards) to increase your credit limit. The math will work the same way and decrease your utilization! $500 borrowed/$1,000 credit limit > $500 borrowed/$1,500 credit limit. Keep your utilization ratio as low as possible to improve and maintain a good credit score.

Pay Frequently

Paying frequently is a great way to keep your credit card utilization low. If your card’s available limit is a small amount, such as $500, you can use the card frequently but implement as pay-as-you-go system so your balance remains low. Utilization is normally reported monthly, so a little extra payment towards the time the utilizations is reported could help your overall ratio.

This tip works best if you are an employee and receive regular payments from your employer’s payroll services. If you are self-employed with irregular income, you may not be able to pay frequently, however, paying the total balance instead of the minimum is a great way to increase your credit score. 

Keep Old Accounts Open

One way of achieving that perfect credit score number is to keep your old, positive accounts open. These old accounts are great for establishing a long and positive credit history on your credit report. If you have any accounts you no longer use, keep them open so the credit and payment history can continue boosting your credit score.

Improve Your Credit Using Credit Score Hacks

By using these credit score hacks, you’ll be well on your way to improving your credit score and benefiting from lower interest rates and credit card approvals.

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