We all know, or at least we should know, that a solid credit score goes a long way when applying for a home or car loan. If such a purchase is on the horizon for you and your family, here are some ways to boost your credit score right away.
First up is a no-brainer and one of the most important: Be on time, every time. Late payments can stay on your credit reports for up to seven years.
It’s something Yolanda Venegas from Oceanside learned the hard way as she set out to buy a home this summer.
She had a few late payments on her credit report. She says she paid a company close to $1,000 to help her increase her credit score. However, at the end of the contract, she says the company did not deliver.
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“Until this day, I haven’t ever got, ‘Here’s the end of your contract, here’s what we were able to accomplish,’ type of email report or anything,” she said.
Remember that it’s not really necessary to pay anyone to boost your credit score. Here are some ways you can do it yourself for free.
- If you have late payments on your credit report, contact your creditor and ask them to remove them. Send them what’s known as a goodwill letter or give them a call. If you’ve only had one or two late payments, they may be willing to help you out.
- Next up, pay down your debt as much as you can. Tackle the higher-interest ones first. Keep each card below 30% of the limit and keep chipping away.
- Request higher credit limits. Your credit score is based on your available credit-to-debt ratio. When your credit limit increases and your balance remains the same, it instantly reduces your overall credit utilization.
- Become an authorized user of a family member’s account. As long as they don’t have late payments and a low or no balance, your score could benefit from their good credit management. They can add you without giving you an actual card or account number so you’re not tempted to use it.
- Check your credit report for errors. A mistake could lower your score so be sure to dispute any errors you may catch.
- Use a secured credit card. You can rebuild your credit with these cards which are funded by cash deposits.
- Get credit for on-time rent and utility payments. When you add these monthly payments to your credit report, you receive a benefit for paying them on time.
It’s important that you check your credit history regularly. Not only do you make sure your identity has not been compromised but you could catch any mistakes that may be hurting your score.
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Remember, every year you have the right to receive one free credit report from each of the three credit reporting agencies.
