Boost Your Credit Score: 5 Helpful Tips

If your credit score is under 650, it’s increasingly difficult to acquire mortgages and other loans. With many lenders tightening the belt with regards to lending requirements, boosting a low credit score is the only way to guarantee approvals.

Of course, improving a damaged score is easier said than done. And despite your best efforts, you can’t fix poor credit overnight. Not to suggest that you shouldn’t even try. Any effort you put forth to boost your credit score can result in faster approvals, lower interest rates and an overall better deal.

Is bad credit standing in your way of a good financing package? Here are five simple ways to add points to your personal score.

Pay your bills on time.

Timely payments are the biggest contributing factor to an excellent credit score. With timeliness accounting for 35% of your FICO score, you can’t afford to miss or skip a payment. Do whatever it takes to send your payments to creditors before your due date. Set up payment reminders or sign up for automated payments.

Erase debt.

Debt is also a major factor in credit scoring. If you need to give your score a fast boost, pay off your credit card balances in full, or decrease balances to where you only utilize 30% of your credit limit. Not only does this help a low credit score. But when applying for loans and mortgages, fewer debts increase your buying power.

Dig up old accounts.

Judgments and collection accounts stay with you for seven years. But while creditors may stop calling after awhile, the debt doesn’t disappear. Dredge up the past and contact old creditors to pay off these balances. In exchange for settling an old balance, ask the creditor to update your credit report status to “paid” or eliminate the delinquency altogether. Either move can have a positive impact on your credit.

Start over with a secured credit card.

If you’ve recently filed bankruptcy, rather than wait for negative items to fall off your credit report in seven to 10 years, take steps to improve your credit score sooner. Apply for a secured credit card and rebuild your credit history. Available to people with poor credit, you can slowly increase your FICO by simply paying your bills on time each month and paying your balance in full every month.

Remove errors from your credit report.

Don’t dismiss the impact a single erroneous item can have on your credit report. It only takes one unfamiliar account or negative item reported in error to bring down your score. Get into a routine of ordering your credit report at least once a year. AnnualCreditReport.com gives every consumer a free report from each of the three bureaus. Check for incorrectly listed late payments and signs of identity theft. If you find any errors, immediately report these to the credit bureaus for removal.