*Article contributed by Sarah Williams.
If your credit score is low, there are various ways to bring it up. You can even increase it to 100 points quickly, depending on several factors. Here are some strategies that you can try with the use of your credit cards:
Ask for a Higher Credit Limit
Whenever your credit limit increases but your balance remains, it will lower down your overall credit utilization. As such, it is best to call your credit card issuer. Call the companies to ask for the best credit card to build credit. Ask them if you can get a higher credit limit. Indeed, this will temporarily drop your score for a few points.
Make Frequent Payments
Making small frequent payments with your credit card can help you increase your credit score. This is called micropayments and it can keep your credit card balances down if you do the payment throughout the month. Consider your credit card as a debit card in which you must pay online the moment that you see that the purchase is posted.
Report Credit Errors
If there is a mistake in your credit reports, it can affect your credit score. Indeed, you are entitled to a free report for each month. You can contact them to request those reports and check them if there are any mistakes. This can include payments marked as late even if you have paid on time or negative information that is too old to be listed.
Make sure to report those errors so it can be removed. The authorities can have 30 days to investigate the matters raised. Call the companies to ask for the best credit card to build credit.
Set Up Payment Reminders
It is best if you can write down payment deadlines for every bill in the calendar or planner. You can also set up reminders online. If you consistently pay your bills on time, you can have a chance to raise your credit score in the next few months.
Keep your Credit Cards Open
If you wish to improve your credit profile, closing your credit cards will make the job harder. As such, make sure to keep your cards open and use it from time to time so it will not close.
Lower Your Credit Utilization Rate
Apart from your payment history, the credit that you have is the next most important fact in determining your credit score. FICO will base 30% of your credit score on the Amounts Owed category included in your credit reports.
Your credit utilization ratio refers to the relationship between credit card balances and limits. Whenever you pay down your balances, it will lower down the utilization ration. Thus, this will improve your credit score.
Conclusion
Indeed, you will not earn a perfect 850 credit score in an instant. If you practice each step, it will lead you in the right direction soon. Moving from bad credit, fair credit, to good credit, you can start saving money and take advantage of more opportunities.
One way to achieve an excellent credit score to develop long-term credit habits. If you follow the tips mentioned above, you can improve your score over time.
*Article contributed by Sarah Williams.