Credit utilization is one of the biggest factors in your credit score. To lower it, you can pay down your balance before your statement closes or make smaller payments throughout the month to keep your balance low. Some people also use extra money, like a tax refund or seasonal income, to pay down their cards. Most card issuers report your balance to the credit bureaus around the end of your billing cycle. You can check your statement for the reporting date or call customer service to ask when and where your account is reported. Quick tip: Set calendar reminders to make payments or add alerts to your credit card accounts. Consider setting up all payments to come out of one account, or putting all of your bills on a single credit card, to help streamline the payment process and keep track of balances.
2. DISPUTE CREDIT REPORT ERRORS
Why this works fast: If an error is removed, scores can jump quickly.
A mistake on one of your credit reports can lower your score. Disputing errors on your credit report can help you quickly improve your credit because the credit bureaus have 30 to 45 days to investigate and respond to your request. You can get free weekly reports from all three major credit bureaus at AnnualCreditReport.com. Review them carefully and look for errors, like payments marked late when you paid on time or accounts that don’t belong to you. Also check for negative items, called derogatory marks, such as a bankruptcy, account in collections or foreclosures that are too old to be listed anymore — most should be removed after about seven years. Quick tip: It takes some time to request and read your free credit reports, dispute errors and track the follow-up. The process is still worthwhile, especially if you’re trying to build your credit ahead of a milestone such as applying for a large loan like a mortgage or auto loan. In those cases, get disputes done with plenty of time to spare.
3. ASK FOR HIGHER CREDIT LIMITS
Why this works fast: A high credit limit can lower utilization without paying down debt, once approved. When your credit limit increases while your balance stays the same, it immediately lowers your overall credit utilization, which is a big factor in your credit score calculation. If you’ve had an increase in income or more years of positive credit history, you’re likely in a good position to request a higher limit. Before asking for a credit limit increase, map out how you’ll keep your spending steady to avoid using the additional credit. If those higher limits are a temptation, this might not be the best strategy for you. Quick tip: Contact your credit card issuer to ask about getting a higher limit. See if it’s possible to avoid a “hard” credit inquiry, which can temporarily drop your score a few points.
16
Powered by FlippingBook