3 Little-Known Ways to Boost Your Credit Score

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What can a higher credit score do for you? A lot, actually.

The stronger your credit score, the more likely a lender is to say yes when you want to borrow money, whether in the form of a new credit card, a personal loan, or a mortgage. And, a higher credit score could be your ticket to snagging a more competitive interest rate on a loan.

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If your credit score needs work, you’ll often hear that paying bills on time is the best way to boost it. And that’s solid advice. Your payment history carries more weight than any other factor when calculating your credit score.

But that’s not the only thing you can do to boost your credit score. You can also use these lesser-known tricks to raise that number.

1. Get a secured credit card

With a regular credit card, you’re given a spending limit you can charge expenses against. With a secured credit card, you limit your spending limit by putting down a deposit that serves as that limit. Or, to put it another way, your deposit secures your line of credit.

A secured credit card won’t necessarily give you a lot more buying power. That’s because you’re only charging expenses against the cash you already have. But if you pay that secured card on time every month, it can help you build up your credit score.

2. Check your credit report

Your credit report is a summary of your credit and borrowing history. It shows the various accounts you have open, how much debt you have, and the different types of debts in your name.

But credit reports aren’t immune to errors. And if yours contains a mistake that makes you seem like a less desirable borrower, fixing that mistake could lead to a credit score boost.

So, let’s say your credit reports lists a debt in your name you never racked up. If you dispute that mistake, the credit bureau behind that report is obligated to look into it. And if it finds that it was, in fact, an error, your credit score could get a lift.

3. Get a credit limit increase

Another factor that goes into your credit score is your credit utilization ratio, which measures how much of your available revolving credit you’re using at once. A ratio of 30% or less is generally considered favorable, so if yours is higher, paying down some credit card debt could help your credit score improve.

But that’s not the only way to lower your credit utilization ratio. You can also lower that ratio by raising your credit limit.

So, let’s say you owe $4,000 against a $10,000 spending limit on your credit cards. That’s a 40% utilization rate. If you manage to raise your spending limit to $14,000, you’ll bring your utilization down to roughly 29%, which could help your credit score increase. And if you’re an account holder in good standing, chances are, a simple call to your credit card companies will result in a higher spending limit.

Paying bills in a timely manner isn’t the only thing you can do to give your credit score a bump. These tips could also help you bring that number up — and open the door to more borrowing choices.

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