Credit Score Hacks
Having a high credit score can be beneficial in various circumstances, including when you want to refinance a mortgage or get a credit card. Here are some hacks to increase your credit score quickly:
Find Out When Your Card Issuer Reports Payment History
Contact your credit card issuer and find out when they report your balance to the credit bureaus. The reporting date is usually the closing date (or the last day of your billing cycle) on your account and differs from the due date mentioned in your statement.
You also have a credit utilization ratio on your overall credit and every individual card. This is the amount of credit you’re using out of the total credit available. It’s advisable to have a credit utilization ratio below 30%. However, an even better way to boost your credit score faster is to keep the ratio below 10%.
The most common problem is that if you pay off your balance beyond the reporting date, the balance reported to the bureaus could be high, which negatively impacts your score as your ratio seems to be inflated. One way around this is to pay off your balance just before the closing date so that your reported balance is low or zero. This reduces your utilization ratio and increases your score.
Pay Twice A Month
Swiping your credit card to purchase big items, like a refrigerator, can temporarily lower your utilization ratio. To get out of this, if you have enough money to clear this balance by the end of the month, make a payment two weeks before the closing date and then another one right before the closing date.
However, as a general rule, don’t utilize your credit card to pay for big bills because it may cause you to end up in debt quickly.
Clear Your Debt Strategically
If you have two cards (say, Card A and Card B), and Card A has a higher utilization ratio, pay down the debt on it first. This will lower the ratio of Card A and increase your credit score.
Apart from these strategies, you could also raise your credit limit, and mix it up with the kind of credit you have. The two main points to remember are to always keep the balance on every credit card low, and pay all your bills in full and on time.