So many aspects of our culture rely on having a good credit score — buying that new car that will turn heads on the highway, finally moving out of that small apartment and purchasing your first home, or even opening a decent checking or savings account.
Unfortunately, it can be easy to lose our footing on the path of good credit. A 700+ score can drop below 600 in what seems like the blink of an eye due to any number of circumstances. You missed some payments during a few lean months. You were out of work for a period and relied on your credit cards until you got back on firm financial ground. An emergency arose, and you had to charge a few thousand dollars on a credit card that you had not budgeted for.
These are just a few common and easy ways our credit scores can take a dive.
While many have searched for some secret, sage advice on how to magically raise scores to the coveted “excellent” classification, the truth is there is no book of credit-boosting spells hidden away somewhere.
Boosting your score takes some effort — but fortunately, there are a few things you can do that can help you see some upward movement in your scores in a short amount of time.
Improve Your Credit Utilization Ratio
Whether you have a credit limit of $2,000 or $20,000, if you max out your available credit, it’s seen as a sign of financial trouble and your credit score will take a hit.
One of the quickest ways to potentially see an improvement in your credit score is to reduce your debt-to-credit ratio. While this could mean paying down your highest balances, this isn’t always the case, as your utilization depends on your available credit as much as on your current debt.
With that in mind, a little bit of strategy can go a long way.
Pay down the credit cards that have the highest usage rates first. If you have debt spread across several cards, prioritize paying down the one that is closest to being maxed out. The new, lower balance will often be reported to the bureaus at the close of your next statement, so your score could see a boost within 30 days or so.
Additionally, if you put a lot of your monthly expenses on credit cards to earn rewards, even if you pay off the balance each month, the credit reporting agencies might only see that you frequently have a high balance on your cards. To help with this issue, it’s a good idea to go ahead and pay down your credit card balances a couple of times a month.
Increase Your Available Credit
Now, if making large payments to bring down a hefty credit card balance isn’t a realistic option for you at this time, you can seek to improve your debt-to-credit ratio in a couple of different ways.
First, you can request an increased credit limit from one of your current credit card companies. If the company agrees to raise your limit, you’ve just improved your debt-to-credit ratio and you may see some movement in your credit score. Just be sure not to actually use your newly acquired credit because it would defeat the purpose of raising it to begin with.
Additionally, you can apply for new credit cards through other issuers. Again, if you are approved for a new card, you will not want to use your new credit — this is simply a means to helping get your credit score back in good standing. Save your new line of credit for when you’re back on your feet.
Check Your Credit Report for Errors
Mistakes happen — even among credit reporting agencies and credit card companies. Unfortunately, an error on your credit report can cause some serious damage to your score. Perhaps a system error from the credit card company reported a late payment when you in fact paid on time. Or you requested a forbearance on your student loans, but someone failed to communicate this to the credit agencies, and it looks like you’ve fallen behind on payments.
It is important to check your credit reports at least once a year to look for — and correct — these kinds of mistakes. If you see anything amiss on your report, you can file a dispute with the credit reporting agency to have the error corrected. If the error was negatively affecting your score, you should see an improvement in your credit score once the mistake is removed from your report.
It Takes Work
While the methods listed here aren’t as quick or easy as one might hope, these are a few solid ideas to get started on improving your credit score. Credit scores will never improve immediately — credit card companies generally report to the credit reporting agencies once a month, so even if these methods give your score a boost, don’t expect to see anything in under 30 days.