Jan 20, 2021
Try These Easy Hacks to Give Your Credit Score a Boost
Your credit score is an important number that will determine the quality of many of the financial factors that will become a part of your life. Want a low-interest rate on a credit card or home loan? You’re going to need a good credit score. Don’t
want to pay a fortune in car insurance? A good credit score will help you get a better rate. Building a good credit score comes with years of good financial habits like making payments on time and maintaining a great credit ratio. There’s no
real shortcut when it comes to obtaining a good credit score but there are some methods you can apply to help you move the needle in the right direction. Here are seven hacks to get to a better credit score.
Tackle high balance credit cards first
Chipping away at debt is always a good idea when it comes to increasing your credit score. If you’re looking to apply for a mortgage or another type of loan and time plays a factor when it comes to boosting your score, then focusing on paying down the credit card with the highest balance will help.
Credit utilization makes up 30 percent of your credit score and it’s something that lenders take into consideration. Lowering your balance will in turn lower your credit utilization which should be around 30 percent. Be sure to go over your credit
card’s limits and balances and look to pay off the card closest to its credit limit.
Increase your credit limit
Sometimes it may not be possible to make any more additional payments than what you’re already making. If that’s the case, look into increasing the limit on your credit cards. Increasing the limit will lower your credit utilization rate. The process varies according to each financial institution but the process is usually simple.
Keep in mind that requesting a credit limit increase could result in a hard inquiry which could impact your credit score. Be sure to check with your credit card issuer if the request will result in a soft or hard inquiry. A soft inquiry does not affect your credit score.
Become an authorized user
Being an authorized user on someone else’s credit card can help increase your credit score while giving you none of the payment responsibilities. If you’re a parent looking to give your child a start in building a credit score, this option could help. This “piggybacking” method allows the user to essentially add the good payment history attached to the primary cardholder to their own. It’s also important to remember that while you are taking on the good history of the primary cardholder, you’re also taking on any negative history as well. Before making a decision, be sure to take into account the primary cardholders' own financial habits.
Make sure you spend to keep old accounts active
It may feel counterintuitive to spend when you’re looking to boost your score, but preventing any negative impacts is important too. If you’ve held on to an old credit card and no longer use it because you have other cards with better rates and incentives, you could end up with your credit card account being closed. Not using a credit card will usually lead it to fall into a “dormant” status and that will usually result in either fees, a decrease in limit or account closure. A decrease in your limit will impact your credit utilization ratio which will affect your credit score.
Before closing an old credit card account that comes with an annual fee, call the credit card issuer to see if the annual fee can be waived. That way, you can maintain a long good credit history without having to close the account which can also affect
your credit score negatively. To avoid this, simply make small purchases every month or so to keep it active.
Try a credit boost service
Credit boost services like Experian Boost allow you to include payments to other services usually not included in a credit report like subscription services (Netflix, Hulu, HBO), phone bills, and other utility bills. If you’ve built up a good payment history with service providers like these, then a credit boost service can help give you some good points almost instantly.
Consider a secured line of credit or loan
Unlike traditional loans, the lender will use the balance in your savings or certificate account as collateral for a one-time advance. While lenders will still require a credit check, secured loans and credit cards consider lower credit scores. Payments made to secured loans and credit cards are also reported to the major credit bureaus which means if you maintain good payment history, your credit score should see a boost.
Utilize credit score tracking apps
Take advantage of the insights that come with your Hughes account and stay on top of your financial activity with CreditSmart. In addition to helping you manage the basics like budgeting, bill pay and more, Hughes’ online banking now comes equipped with CreditSmart, an online tool meant to help you track and improve your credit score. You’ll also get access to your credit report plus a breakdown of your credit score to help you figure out which scoring factors (payment history or credit usage, etc.) you might want to focus on. Keep tabs on your score with credit monitoring alerts and daily score updates.
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