As a working professional, you’re constantly looking for ways to improve your financial standing. But did you know that your credit score can play a huge role in your overall financial health? Your credit score can affect your ability to get a loan, credit card, or even a job. So it’s important to know how to boost your credit score and take advantage of all the benefits that come with a healthy credit score.
In this article, we’ll explore 10 surprising ways to boost your credit score, so you can improve your financial standing and take advantage of all the opportunities that come with a good credit score.
Introduction to Credit Scores
If you’re unfamiliar with credit scores, it is important to understand what they are and how they are used. A credit score is a three-digit number between 300 and 900 that reflects your creditworthiness. It is calculated based on your credit history, which includes information such as your payment history, the number of accounts you have open, and the amount of debt you have.
In Canada, the two most widely used credit scores are Equifax and TransUnion. Both of these credit bureaus use their own scoring models to calculate your credit score. These scores are used by lenders to determine whether or not you are a good candidate for a loan. A higher credit score indicates that you are more likely to be approved for a loan, while a lower score indicates that you are less likely to be approved.
How to Check Your Credit Score
It is important to check your credit score regularly to make sure that it is accurate and up-to-date. You can check your credit score for free through both Equifax and TransUnion. You can also use credit score tracking services like Credit Karma or Credit Sesame, which offer free credit score monitoring. It is important to monitor your credit score so that you can stay on top of any potential errors or discrepancies.
10 Surprising Ways to Boost Your Credit Score
Now that you’re familiar with credit scores, let’s take a look at 10 surprising ways to boost your credit score.
Pay Bills on Time
The most important factor in determining your credit score is your payment history. It is important to make sure that you are paying all of your bills on time. Late payments can have a negative impact on your credit score, so it is important to make sure that you are paying your bills on time. You can set up automatic payments for your bills so that you don’t have to worry about forgetting to make a payment.
Pay Down High-Interest Debt
If you have any high-interest debt, it is important to pay it down as quickly as possible. High-interest debt can have a negative impact on your credit score, so it is important to pay it off as soon as you can. You can also consider consolidating your debt or transferring it to a lower-interest credit card.
Lower Your Credit Utilization Rate
Your credit utilization rate is the amount of credit you are using compared to your total available credit. It is important to keep your credit utilization rate low, as this can have a positive impact on your credit score. Try to pay down your debt and keep your credit utilization rate below 30%.
Use a mix of credit accounts
Having a mix of credit accounts can help to improve your credit score. This includes having a mix of different types of accounts, such as credit cards, installment loans, and even mortgage loans. This shows lenders that you are able to manage different types of credit accounts responsibly.
Dispute Errors on Your Credit Report
It is important to make sure that your credit report is accurate. If you find any errors or discrepancies, it is important to dispute them with the credit bureaus. This can help to improve your credit score and make sure that your credit report is up-to-date.
Don’t Close Old Credit Cards
Closing old credit cards can have a negative impact on your credit score, so it is important to keep them open. Even if you don’t use them, keeping them open can help to improve your credit score.
Limit New Credit Applications
It is important to limit the number of new credit applications you make. Each time you apply for a new credit card or loan, it can have a negative impact on your credit score. So it is important to limit the number of new credit applications you make.
Avoid Co-Signing Loans
Co-signing a loan can have a negative impact on your credit score, so it is important to avoid co-signing loans. If you do co-sign a loan, make sure that the other person is reliable and will make the payments on time.
Get Added As a Joint Account Holder
If you are married or have a close family member or friend who is willing to add you as a joint account holder, it can help to improve your credit score. This will show lenders that you are able to manage your finances responsibly.
Use Professional Credit Repair Services
If you are having trouble improving your credit score, you may want to consider using a professional credit repair service. These services can help you to identify errors on your credit report and dispute them with the credit bureaus. They can also help you to manage your debt and improve your credit utilization rate.
Conclusion
Improving your credit score can seem like a daunting task, but it doesn’t have to be. By following the tips outlined in this article, you can take steps to improve your credit score and take advantage of all the benefits that come with a good credit score.
By making sure to pay your bills on time, paying down high-interest debt, lowering your credit utilization rate, using a mix of credit accounts, disputing errors on your credit report, avoiding closing old credit cards, limiting new credit applications, avoiding co-signing loans, getting added as a joint account holder, and using professional credit repair services, you can boost your credit score and improve your overall financial standing.
So, if you’re looking to improve your credit score and take advantage of all the benefits that come with a good credit score, these 10 surprising ways to boost your credit score can help.
