Maintaining decent credit is kind of an important thing to master if you want to be able to buy a house, car, or even get approved for loans. I’m not saying it is impossible to buy a house or car; however, the guy with the amazing credit score will probably get the lower interest rate instead of the other person with a low one. With a high-interest rate comes high fees which could’ve saved you a large amount of money in the course of the loan. Luckily, I’ve managed to increase my credit score a good amount of points in a short amount of time. Keep reading to see my 4 strategies to help YOU build the perfect credit score.
Tip #1: Pay Your Bills On Time.
No one likes bills. I get it. But they’re there. And you have to pay for them. So do yourself a favor and pay them. On time. Leaving them on the kitchen table for days until you forget isn’t paying them. If you need to set a reminder or have the money automatically withdrawn, DO IT. To make things easier, pay all your bills that same day. Your credit score will thank you. If you REALLY can’t afford to pay your debt in full, always aim for a little more than the minimum. For example, if your minimum is $38, aim for $45 or even $50.
Tip #2: Become an Authorized User on Someone Else’s Card.
If you are going to become an authorized user, make sure it is someone you trust, like a parent or spouse. Make sure this person has low debt and pays their bills on time, too. The good thing about this is, you don’t need to have access to the card. Just being on the account will make your score skyrocket. I became an authorized user on my mom’s card when I was 16 and it helped me increase my credit score by many points since she was smart with her money. Thanks mom!
Tip #3: Limit What You Spend
You should only be using 30% of your total card limit (even less if you can). It shows that you are a responsible adult who is not easily tempted and knows how to handle money. Try not to have a $400 balance on a card with a $500 total limit. Aim to have little debt and lots of credit. Maxed out credit cards don’t look so great in the reports and they can really affect your score.
Tip #4: Increase Credit Limit
Go online and look around until you see an option that lets you make a request for a credit line increase. I have the Discover Card App and it was really easy to find (literally by the side menu). If you have looked and found nothing, just call and ask! Think about it. The total credit owed factors at 30% in determining your credit score. That’s a big percentage. With a higher credit limit, your outstanding balance will be one step closer to being in the 30% card limit. For example, let’s say your total card limit is $1,000 and the balance is $500. To credit card companies, you are using 50% of your credit utilization. Not good. However, if you manage to increase your credit limit to $2000, you will only be using 25% (500/2000).
There you have it, the 4 hacks that will help you build the perfect credit score easy and fast. Let me know in the comments if you have any ideas I may have missed! 🙂 xo
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