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5 Insider Tips for Boosting Your Credit Score
A better credit score can make your financial life easier in more ways than one when you need to borrow money. But how do you get a good or perfect credit score?
Having a magic wand could be a huge help for boosting your score instantly but that’s not exactly realistic. And you might be tired of hearing the same advice on how to improve credit scores repeated over and over.
The good news is, there are some under-the-radar tips you can to try to raise your credit scores.
1. Remember Report Dates, Not Due Dates
Due dates are important to know for credit scoring. After all, a late payment can kill your score if it hits your credit report.
But there’s also a case to be made for knowing the date your creditors report your account details to the credit bureaus, which is typically your statement closing date. Why? Because the balance that gets reported can directly impact the credit utilization ratio that’s used for your score calculations.
Say you have a credit card with a $5,000 limit. You charge a $3,000 purchase to it, which puts your credit utilization at 60%. ($3,000/$5,000 x 100 = 60%).
Ideally, it’s good to keep your credit utilization ratio at 30% or less for the best credit score results. If you were to pay that balance off before the reporting date, then your credit utilization ratio drops to zero.
The bottom line? Call your credit card companies to check the reporting date. Then plan your payments to your cards going forward around those dates, rather than your due dates.
2. Double Up on Monthly Credit Card Payments
Another easy tip for improving your credit scores is changing up the way you make payments. Instead of making a single payment by your statement closing date, you can make a second payment earlier in the month.
The benefit of doing so means a reduction in your credit utilization ratio. Again, the more you can bring that number down before your reporting date, the better for your credit score. And as a bonus, you can save money on interest charges by lowering your balance.
3. Put Payments on Autopilot
If you’re not using autopay to manage your credit card bills, student loans or other accounts, you could be missing out on a chance to raise your credit scores. Payment history accounts for the largest share of your FICO credit score. By paying bills automatically each month, you don’t have to worry about missed due dates.
Not comfortable with automatic payments? You could still boost your credit score by using due date reminders. Set up bill alerts with your bank or credit card company to easily keep tabs on when your monthly payment is due.
Bonus tip: Set up a separate alert to track your card balances each month.
Aside from doubling up on payments, you can also use alerts to manage your credit card utilization. You can set an alert to notify you when your card balance reaches a certain limit each month. This can be a simple reminder to put the brakes on new purchases and make a payment to bring your utilization ratio down.
4. Add Missing Accounts to Your Credit Reports
Your credit scores are based on the information in your credit reports. The credit bureaus can report accounts to one or all three of the credit bureaus, including your:
- Payment history
- Account balances
- Credit limits
If you haven’t checked your credit reports lately, give them a look to see which accounts are being reported to which bureaus. If you notice that an account isn’t being reported to all three bureaus or any bureau at all, you can ask your creditor to consider adding that information. This way, you can get credit for the efforts you’re making to improve your scores.
5. Mix Things Up With a Personal Loan
Credit cards aren’t the only way to build good credit. In fact, having a loan or two on your credit history can also help boost your score.
If you don’t have any loans in your name, consider taking out a small personal loan to diversify your credit mix. Even a loan of a few thousand dollars can be enough to help raise your credit score if you’re making payments on time each month.
Be sure to shop around and compare personal loan interest rates, fees and terms. It’s important to find a loan that fits your budget, otherwise, you might struggle with making payments and harm your score rather than helping it.
Making positive changes in your credit score sometimes requires outside-the-box thinking. These credit score hacks can help boost your credit profile and potentially make it easier to qualify for loans at the most favorable interest rates.
Rebecca Lake is a freelance writer specializing in personal finance, credit and debt. She’s a contributor to U.S. News and World Report, Forbes Advisor and The Balance and her work has appeared online at CreditCards.com, MyBankTracker, Money-Rates.com and dozens of other top publications.