Credit Score Hacks
Credit repair is a long and difficult process. Getting results from credit repair efforts takes time, maybe years to build a good credit history.
Your credit scores vary significantly among different people. Most of the credit reporting companies have a credit score scale ranging from 330 to 830.
This article talks about the best credit score hacks to improve your credit score fast and credit card hacks to help you to save your money. You can improve your credit score in a shorter period.
Credit Score Increase Hacks
To improve your credit score:
- Improve your credit utilization ratio.
- Pay off low balances accounts.
- Make on-time payments.
- Make monthly payments.
Improve Your Credit Utilization Ratio
If you want to improve your credit score fast, pay down your high-balance cards. The credit utilization ratios refer to the revolving accounts. The individual utilization ratio is more important than your overall utilization ratio.
If you have one or more maxed-out credit cards or accounts, it can drop your score even if your overall credit utilization ratio is low.
Pay off Low-Balance Accounts
If you pay off your low-balance accounts, it reduces the number of accounts with low balances. One of the factors considered within the overall credit utilization is the number of accounts that have balances.
Having fewer accounts with balances is better for your credit score.
If you can pay some of your accounts to zero, you should see a boost to your score.
Make On-Time Payments
If you pay your credit card balance in full by the due date every month, you should have 0% utilization for that account. The reason is that the date when your credit card issuer reports to the credit bureaus is not the same as your payment due date.
Your account is reported at some other time during the month when your card has a balance on it. If you use a significant portion of your credit limit, the utilization on that account could hurt your score.
You can pay your bill at your normal time and then refrain from using your card for the next entire billing cycle. Since you have paid off the balance and have not made any new charges, your account will show zero balance at the end of the reporting cycle.
You can shift the timings of your payments so that your account has 0% utilization rates, which provide a significant benefit to the credit utilization portion of your credit score.
Make Multiple Payments in a Month
Another credit score hack is to make frequent payments in a month. By making frequent payments you can keep your credit utilization rate down.
You can maintain a lower balance consistently if you make multiple payments in a month.
This method helps to balance your cash flow and make your budget easier since you can divide your credit card bill over multiple paychecks.
Credit-Building Hacks
Here are some credit-building hacks:
- Piggybacking credit.
- Apply for a credit-builder loan.
Piggybacking Credit
One of the fastest and easiest ways to build your credit is piggybacking credit.
In this method, you will be an authorized user for someone else’s good credit account to build your credit history.
There are three main ways to piggyback credit:
- Become an authorized user.
- Get a co-signer.
- Open a joint account.
Apply for a Credit-Builder Loan
If you have bad credit or if you have never used credit before, you might be feeling discouraged about the prospect of getting credit or good credit.
It can be impossible to get better credit if you have a thin credit file or a history of derogatory marks on your credit report.
A credit-builder loan is a useful tool to build credit. Here’s a summary of how they work:
- Credit-builder loans are for small amounts.
- A credit-builder loan is a backward version of traditional loans. Instead of receiving the funds upfront and paying the money back later, you will make the monthly payments first and then receive the loan payments once you have paid off the loan.
- These types of loans are low-risk for lenders.
- The lender reports your payment history to the major three credit bureaus (Experian, Equifax, and TransUnion), which helps in building your credit history.
Credit Score Hacks- Credit Card Hacks
- Increase your credit limit.
- Lower your interest rates.
- Automatic bill payments and late fees.
- Pay off debt faster.
- Transfer your balances to a card with a lower interest rate.
Increase Your Credit Limit
If you want to increase your credit score, a credit card comes into play. A credit card is another important credit score hack. Increasing your credit limits is one of the easiest and fastest ways to boost your credit score.
If your financial situation has improved while opening your credit cards, it is a good time to request a credit line increase from your credit card company.
Also Read:
If you have been a responsible cardholder for at least six months and you don’t have too many inquiries on your credit report, you can make your request. Don’t request an increase if you have requested one within the past six months.
Check for hard or soft inquiries on your credit report. If you don’t want to get a hard inquiry on your credit report, there is an amount they may be able to approve without doing a hard pull on your credit.
To make a request for a credit limit increase, it is good to get prepared to provide some financial information and to explain why you are asking for additional credit.
Your credit utilization ratio makes up your FICO score and Vantage score. It is the ratio of how much debt you owe to the amount of your available credit.
You can improve your credit score by increasing your credit limit, which increases both your overall and individual utilization ratio.
Also Read:
Lower Your Interest Rates
You can call your credit card issuer and ask them to lower your interest rate. Explain to the card issuer why you want to lower your interest rates and also how your financial situation has improved since you opened the card.
If you lower your interest rate, it reduces the debt burden that comes from interest charges each month, allowing you to pay off your debt faster.
By paying off your debt faster, you can improve your credit score.
Automatic Payments and Late Fees
You can set up automatic payments, which is one of the best things you do for your credit. If you are not good at remembering due dates or if you have accidentally missed payments in the past, go for setting up automatic payments.
Payment history is a major factor that impacts your credit score.
By setting up automatic payments for all of your loans and credit cards, you will never miss a payment and can continue to build up a positive payment history each month.
For example, if you happen to miss a payment and you didn’t have an automatic bill pay yet. Make the payments as soon as you can to get caught up. If you make the payments within 30 days after your due date, you can avoid getting a mark on your credit report.
Give your credit card issuer a call, explain the reason for the late payment, and ask them to waive your late fee.
If your payment was delayed more than 30 days, your credit card issuer will report the minor deprecatory action to the credit bureau. You can ask your lender if they would forgive the late payment as a one-time courtesy and stop reporting it to the credit bureau.
Transfer Your Balances to a Lower Interest Rate Card
Another way to get out from paying those astronomical interest charges every month is to transfer your credit card balances to another card with a lower interest rate.
This hack works best if you have good credit to qualify for a balance transfer credit card. These credit cards are for this purpose and provide some offers like 0% APR (Annual Percentage Rate) on balance transfers for a certain number of months.
The lower interest rate card helps to improve your credit utilization ratio because you are adding some available credit to your credit profile by opening a new account.
Bad Credit Score Hacks
Some bad credit hacks are:
- Remove hard inquiry from credit report
- Delete collections from your credit report
- Time your credit inquiries
Remove a Hard Inquiry from Your Credit Report
If your credit score goes down due to some errors like credit inquiries, this hack will boost your credit score.
You need to get a copy of your credit report to check for errors. You need to contact the bureaus for your credit report.
Then, check your credit report for any inaccuracies, like late payment reports that you made on time, any duplicate accounts, or any unfavorable information that is more than seven years old.
To fix the errors on your credit report, you can dispute the items to the credit bureaus and contact TheCreditpros for any credit repair help or you can get a free consultation.
Once the credit bureaus receive the dispute letters, they have 30 days to investigate the letters. If they cannot verify the information to be accurate, then they have to either update the item with the correct information or remove the item from your credit report.
Delete Collection from Your Report
If a collection account on your credit report is reported incorrectly or doesn’t belong to you, then you can certainly dispute the inaccurate information and have the bureaus update or remove the item.
If you have a collection account on your credit report it is possible to get them deleted depending upon the circumstances.
If you want to delete a collection account without paying it, your only option is to wait for the collection account to be removed from your credit report automatically. This happens seven years after the date that you were the first delinquent on the account.
Time Your Credit Inquiries while Shopping for Credit
If you’re planning to shop for credit, you will get some hard inquiries from lenders on your credit report.
Lenders will check your credit history before they decide whether or not to extend your credit. When you apply for a loan or credit card, the lender will request a hard inquiry on your credit report from any one of the credit bureaus.
If you can complete all of your hard credit inquiries for a loan within 14 days, then the inquiries will be grouped together and you can avoid ending up with too many inquiries on your credit report.
Consider Having a Secured Credit Card
Having a secured credit card is another credit score hack that improves your scores.
The lenders will use the balance in your savings account as collateral for a one-time advance. Payments that are made to secured loans and credit cards are reported to the credit bureaus. To boost your credit score, you need to maintain a good payment history.
Also Read: Need to know about secured credit cards.
Get Out of Credit Card Debt
If you want to increase your credit score, then tackle your credit card debt. There are two methods through which you can repay your debt.
Having a repayment strategy will help you get your credit card debt in check.
- Pay more than the minimum.
- Snowball debt.
- Avalanche method.
- Debt Consolidation.
Pay more than the minimum
Take a look at your credit card statements. If you pay the minimum balance on your credit card, it takes much longer to pay off your bill. If you pay more than the minimum, you will pay less in interest. Your card company is required to document this on the credit statement.
Snowball Debt Method
In snowball debt, you will pay off the cards with the small balances first and work up from there. You will not be saving most in interest rates.
Debt Avalanche Method
Have a look at the interest rate section of your statements to see which credit card charges the highest interest rate, and concentrate on paying off the debt.
Debt Consolidation
If your credit is good but your debt payments are more, consider consolidating them into a single account. That way, you only have to make one payment each month to reduce the balance.
Also Read:
- How To Get Credit Card Debt Forgiveness?
- How Long Does Credit Repair Take?
- Debt Consolidation – The Truths and Myths
Key Takeaway
There is no time and effort to be replaced for establishing and maintaining a proper credit history. You can try some of these credit score increasing hacks to help you to improve your credit score and save money on credit card interest and fees.
