The Vine tackles credit score
| | | | | February 2023 Most of us know the rules when it comes to improving our physical health: eat more fruits and vegetables, exercise a few times a week and focus on getting more sleep. But what about boosting our financial health? One of the best things you can do for your financial fitness: Increase your credit score. A high credit score can unlock the door to a better financial life—you'll qualify for lower interest rates on credit cards and loans, including your mortgage, which means you can save thousands of dollars over the life of a loan. A good credit score can also help you access higher credit limits, better car insurance rates and credit cards with powerful rewards programs. Don't have perfect credit? Don't worry. Boosting your credit score by even a few points can yield positive results. Read on for the best credit score hacks. —Ismat Mangla, Editor The best way to boost your credit score: pay your bills on time The number one thing you can do to improve your score? Don't make late payments. In a recent LendingTree study of consumers with high credit scores, the one thing they had in common was consistently paying their bills on time. If you have credit cards, make sure you make at least the minimum payment on your account by the deadline every month. Prone to forgetting? Take advantage of automatic bill pay through your bank or credit card so that you're protected against missed payments. For installment loans, you can schedule the same amount to be paid every month. For credit cards, schedule at least the minimum payment so you're never late–and then adjust the payment amount every month if you want to pay more. You can also make a list of all the bills you have due every month and when their payments are due, and schedule them into an online calendar that sends alerts to your phone. | | Pay down debt and bump up your credit limit In addition to making payments on time, these two actions can help increase your score: Here's how: | | Pay down credit card debt. Credit scoring models value consumers who have access to credit but don't carry a lot of debt. So if you use credit cards, try to pay down your credit card debt and avoid carrying a balance. | | | Bump up your credit limit—but don't use it. Conversely, you can try to increase the amount of credit available to you by opening a new card and limiting your usage, or requesting your bank to increase the limit on your credit card. The key to this working? Don't increase your spending. | Pro Tip "Credit utilization is really important to your credit score. While the best way to improve it is to reduce your debt, you can change the other side of the equation, too, by increasing your available credit. Do that either by applying for a new card and using it only sporadically or asking your current credit card issuers to increase your card's limits. Issuers are often willing to work with cardholders on these things, but you'll have to ask." —Matt Schulz, chief credit analyst at LendingTree | | Correct errors on your credit report, but beware of credit washing An error on your credit report can bring your score down, so be sure to review your credit reports annually. You are entitled to a free copy of your credit report from each of the three credit bureaus once a year. Visit annualcreditreport.com to download your reports and review them to make sure there aren't any accounts that don't actually belong to you, erroneous late payments or other mistakes. If you do find an error, dispute it directly with the credit bureaus. But watch out for "credit washing," a practice in which some credit repair companies file false identity theft claims to temporarily boost a consumer's score. "That claim often leads to the item in question being removed from the person's credit report (at least temporarily) while the claim is investigated," says Schulz. "That removal often bumps up the person's credit score." But once the claim is flagged as fraudulent, your score goes back down–and the credit repair company already has your money. | | | |
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