Many people dread looking at their credit score. I look forward to it every month because I can’t wait to see how much it moved up. Improving my credit score has become a game of strategy for me. Each month, I try different ways to boost my score. This past month, I saw the biggest leap in my score. Here’s how I boosted my score by 35 points in one month.
Get rid of unnecessary accounts.
I have a ton of credit cards. Not a good idea; but 23-year-old me living in the big city thought otherwise. I won’t close the accounts because they help with my score – if I use them wisely, responsibly, and strategically (more on that later). However, there was one card that was causing my score to drop – my husband’s credit card. This particular card is used solely for his schooling purposes before his financial aid comes into play. That means it frequently has high balances. I was put on the card incase of emergency, but have never used it. Besides, I think I have enough cards to cover an emergency! So, I asked the bank to take my name off the card. Because I did not technically own the card, it did not count as closing an account, so my credit score was not harmed by removing my name. It only caused my score to jump back up to where it was before the semester’s bookstore shopping spree.
If you share an account that you never use, why stay on the account? Just make sure you talk to the other person on the account before removing yourself.
While I don’t necessarily recommend opening more accounts (credit inquiries can cause your score to drop a few points), I took a gamble and got another credit card. With this card, I consolidated all of my credit debt. That paid off two other cards early. This demonstrated good credit behavior. Not only that, I no longer had to pay two different interest rates. Instead, I am now paying my new debt with 0% interest for 15 months.
Make a big payment.
A while ago, I was hit by a car while stopped at a red light. I had to pay a $1,000 deductible to my insurance company to get my car fixed. Once the police report came back and the insurance companies worked it out – more than one month later – I was refunded the money. Since so much time had passed, I was no longer missing that $1,000, so I decided to save a portion of it and use the rest to make a big payment on my credit card.
By paying a few hundred dollars in debt, I increased my available credit. Typically, you want the balance on your revolving accounts to be less than 30% of your credit limit.
Resurrect a few accounts.
Inactive accounts can negatively affect your credit score. By using every account occasionally, you demonstrate good credit behavior. This doesn’t mean you have to go on a shopping spree. When I used a few accounts that had been inactive for months (or years), I only used them to purchase something for under $5 and immediately paid the card off. Two important pieces of advice if you choose to do this: Do not put a large balance on the card and only spend what you can pay off immediately. Do not start using an old card if you do not plan to pay it off immediately or if you are already in deep credit debt. This tactic takes willpower!
When trying these tricks, it is important to know that many of these take a good amount of control. Opening a new account and having even more money available to you can make it tempting to make a big purchase. And it can be hard to spend only a small amount on a card that’s been inactive for some time. While I recommend giving these a shot, I do not know your financial situation. You know your finances and control the best, so be smart. These tactics won’t work if you aren’t responsible or strategic with them.