New Year, New Credit Score: Tips to Increase Your Score
While we may not be a financial institution, we’ve done our research and pulled together a list of some of the best ways to increase your credit score to start the New Year off right! For some, this may seem like a terrifyingly daunting task, but in just a few steps, you could have your credit score seeing 2020 vision in no time! After all, a good credit score is crucial for buying a home and getting lower interest rates. So, stick around for some beneficial tips on how to improve your score!
1. Make Frequent Payments
It may not seem that obvious, but making smaller payments, also known as micro-payments, throughout the month can help you pay off your debt quicker and in turn improve your credit score. It’s even a good idea to treat your credit card like a debit card where you immediately pay it off after every purchase.
“Making multiple payments throughout the month works on a credit factor called credit utilization, which has a powerful effect on scores.” [NerdWallet.com] If you’re able to keep your utilization low and not let it build toward your payment due date, it should only benefit your score.
2. Get A Higher Credit Limit
When your credit limit increases and your balance stays the same, it instantly lowers your overall credit utilization, improving your chances of increasing that credit score. Do this by calling your card issuer and asking if you can get a higher limit without a “hard” credit inquiry, which can temporarily drop your score a few points.
3. Keep Credit Cards Open
Contrary to popular belief, it’s a good idea to keep credit cards and accounts open, even if you aren’t using them. If you’re looking to improve your credit score fast, closing an account could make that job harder. Closing a credit card means you lose that card’s credit limit when your overall credit utilization is calculated, leading to a lower score. Keep those accounts open and use them occasionally, so the issuer doesn’t close them.
4. Diversify Your Accounts
Mix up your credit a bit. If you have only loans or only credit cards in your name, consider getting whichever one you don’t have. Having both installment accounts and revolving credit can boost your perceived creditworthiness.
Once you have your credit in tip-top shape, our agents are ready and waiting to help you make your dream home a reality. Contact us today at (817) 717-6036 to get the process started or visit our website to see the latest North Texas listings!