Did you know that the average FICO credit score in America is 716 points? A score this high ranks as good bordering on excellent.
While it’s great to see many people who are working hard to boost their scores get awesome results, it’s still easy to wind up with a less favorable credit report. If you’re not happy with your current credit score, you should take comfort in knowing that there are lots of ways to improve your credit score.
Would you like to empower yourself with the best tips that can transform your finances? Read on to unpack five simple steps you can take to watch your credit score soar.
1. Avoid Spending Money You Don’t Have
One of the largest hurdles people face once they have a credit card is resisting the urge to spend beyond their means. Credit cards tend to come with high interest rates that bury people in debt fast.
If impulse buying is an issue for you, then you should start shopping with cash more often so you’re in control. You could also make the switch to a secured credit card to help hold yourself accountable.
Credit cards can be great tools for managing your spend if you can spend within your means and pay off your balance each month.
2. Don’t Open New Credit Cards
Some people don’t know that credit history plays a big role in the scoring system. The longer a line of credit has been open, the more trustworthy the borrower becomes.
This means that a person with a great credit score could impact their number by opening a bunch of new credit card accounts. Try to avoid frequently starting new lines so that your current accounts have time to mature. Once you’ve had a credit card opened for long enough, then you can begin to add additional lines of credit, which may help improve your score. Some card companies will want you to wait 6 months before opening a new account.
Reasons a new credit card might improve your score:
- It increases how much credit you have available. If you don’t spend much but have a larger line of credit, this might help improve your score.
- Thin credit file is a term that refers to someone with no credit or little credit history. Car loans, mortgages, and credit cards can help show a history of how someone uses their credit and how responsible they are with it.
There are credit builder cards and great rewards cards (good to excellent credit) available if you’re concerned that a thin credit file is impacting your score.
3. Enroll in Automatic Payments
Something as simple as enrolling in automatic payments could lead to a significant credit score increase. This will help you avoid forgetting to pay off your credit card manually each month.
If money is tight, then you can set these automatic payments to the bare minimum owed. However, you’ll get the best results if you’re able to pay off the entire statement each month.
4. Ask for a Credit Line Increase
Another quick thing you can do to boost your credit score is ask your lender to increase your credit line. It’s always good to maintain a low credit utilization ratio and this task becomes much easier when your roof is higher.
When you’re contacting your credit provider, be sure to verify that they’ll do a soft check on your credit that won’t bring your score down further.
5. Consider Becoming an Authorized User
Are you close with someone who already has an ideal credit score? If they’re willing to do you a favor, they can help your credit score skyrocket right away by adding you as an authorized user to their account.
They don’t even need to give you access to their credit card information, which can give them peace of mind about their financial security.
It’s Possible to Improve Your Credit Score Overnight
If you’re struggling with finances, then you might be feeling like it’s impossible to improve your credit score. By using these five clever tricks, you can get ready to see noticeable growth in no time.
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