Today we are talking about a few unusual ways you can raise your credit score!
A low credit score can be problematic when you want to make a large purchase, such as buying a house or financing a car.
Luckily, raising your credit score isn’t as impossible as it sounds.
It’s totally possible to raise your score with a few simple changes.
And since credit scores can affect everything from insurance rates, to loan interest rates and other important financial products.
Basically, a higher credit score means more opportunities for you.
Here are a few simple and unique ways to raise your credit score.
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Piggyback on Family
One way you can raise your credit score is by piggybacking off of someone else’s good credit history.
If you have a family member or good friend who has a good credit score, you could consider asking them to add you to one of their accounts.
For instance, if they have a credit card in good standing that they pay off regularly, you could ask to have your name added.
Most credit card companies allow this and it’ll increase your score to have a positive account on your record.
You’ll be an authorized user on their credit card account and you’d be able to make purchases and pay the bills.
Of course, don’t be ask to be added, with the intention of using their credit card irresponsibly.
If a family member is sweet enough to allow you to piggyback off their credit, make sure you are contributing more than you are taking.
You can do this by paying more than your portion of the bill every month and make sure to do it in a timely manner.
Keep Your Old Accounts Open
I know it’s tempting when your spring cleaning your finances and to cancel old accounts.
But it’s important to keep older credit card accounts open as they influence your credit score.
Credit scores can actually decrease if you close some of your accounts!
The age of the credit account also matters.
Scores are affected positively by older accounts because they show that you have a history of maintaining credit.
Plus, these older accounts add to the amount of credit you have access to, which lowers the percent of available credit you’re using, which raises your score.
For example, if you have an old credit card with a $5,000 limit that’s completely paid off, and you have a different card maxed out at $2,000, you’re only actually using $2,000 of your $7,000 of available credit.
That means you are only using 28% of your available credit, which increases your score.
According to NerdWallet The general rule of thumb is to try to keep your credit usage to less than 30% of what’s available.
But they go on to say that the lower the better.
That in fact, FICO suggests that those with the highest scores utilize a very small percentage of their available credit.
Suggesting that those with a score of over 800 usually utilize less than 7%.
Set up Auto Payments
Automatic payments are an easy way to make sure you pay your bills every month.
They also make it easy to avoid a late payment penalty and fee.
And although setting up auto payments won’t directly affect your credit score, they will make it easier to avoid a silly mistake that will lower it.
Ask for Good Will Deletions
Did you know you can ask credit reporting agencies and lenders for good-will deletions?
Late fees, late payments or unpaid bills can affect your credit score.
A goodwill deletion is a request to remove these items based on your prior good history.
This method usually only works if you have a longer history with the creditor with few previous issues.
But it’s a great way to get a one time mistake off of your history if you’ve been good about payments before.
Avoid Those Pre-Approved Offers
You know those pre-approved offers that come in the mail, avoid those.
They usually require a credit check, and multiple hard credit checks can lower your credit score.
It’s also good to avoid these because creating too many accounts makes it easier to make mistakes.
Having fewer accounts are much easier to manage.
Avoid New Utility Accounts
Utilities like gas, electric and water services require credit checks.
Too many of these hard inquiries can negatively affect your score.
Instead, try transferring your utilities to a new address instead of opening new ones.
Pay Your Library Fines
Did you know that unpaid library fines can affect your credit score!
It’s true. Make sure to return those library books and pay any late fees.
Libraries can send any unpaid bills to collection agencies.
Not only is it embarrassing to be harassed from collections over a library fine, it’s also terrible for your credit score.
Avoiding Online Quote Comparisons
When you request an online quote for insurance or a loan, these count as hard inquiries on your credit score.
These credit checks affect the score each time you ask for a quote.
Getting quotes from several websites can lead to several credit checks.
Instead, narrow down your options before getting the quote.
That way your score is minimally impacted.
Establish Long-Term Credit
Instead of switching to a new company that promises lower rates for a few months, consider staying with the previous one.
Credit scores go up based on positive, long-term relationships with lenders.
It may be tempting to take the lower rate credit card offer from another company, but your credit score may suffer.
It’s totally possible to raise your credit score with several strategies.
Careful planning is an important part of getting a higher score.
Be patient and know that building your credit takes time.
You won’t see an immediate jump in your score, but over time these small changes will help you get your score closer to where you want to be.
