3 Strategies to Increase Your Credit Score

Is your credit score costing you money?
A recent survey found that increasing a credit score from âFairâ to âVery Goodâ could save borrowers an average of $56,400 across five common loan types like credit cards, auto loans, and mortgages.š Thatâs roughly $316 in extra monthly cash flow!
If your credit score is anything but âVery Good,â keep reading. Youâll discover some simple strategies that may seriously help improve your credit score and increase your cash flow.
Pay your bills at the strategic time.
Credit utilization makes up a big portion of your credit score, sometimes up to 30%.š The closer your balance is to your credit limit, the higher your credit utilization. The lower your utilization, the less youâre using your available credit. Creditors view a lower utilization as an indicator that youâre responsible with managing your credit.
Hereâs a simple way to lower your credit utilizationâask your creditors for when your balance is shared with credit reporting agencies. Then, automate your bill payments to just before that day. When credit reporting agencies review your balances, theyâll see lower numbers because you just paid them down. That can result in a lower credit utilization and a higher credit score!
Automate debt and bill payments.
Late payments for your credit card bill, phone bill, and utilities can negatively affect your credit score. If you have a habit of paying your bills late, consider automating as many of your payments as possible. Itâs a convenient and simple way to make your finances more manageable and help increase your credit score in a single swoop!
Leave old credit accounts open.
So long as they donât require a monthly fee, leave old and unused credit accounts open. Any open line of credit, even if itâs unused, increases the amount of available credit you have at your disposal. And not using that credit lowers your overall credit utilization, which can help increase your credit score.
Closing unused credit accounts does the opposite. It lowers your available credit and spikes your credit utilization, especially if you have large balances in other accounts. So if you have credit cards you donât use anymore, leave those accounts open and hide the cards in a place where they wonât tempt you to start spending!
The best part about these strategies? You can act on them all today. Ask your creditors when your balance is shared with credit reporting agencies, then automate your deposits to go through right before that day.
When youâre done automating your payments, put your unused credit cards into a plastic bag and put them deep into your freezer. In just a few hours, youâll have set yourself up to increase your credit score and save money!