When the monthly statements roll in, it can be very stressful. You know that the best way to raise your credit score organically is to pay everything off over time. In the process, you take on extra work, sell off valuables, and adhere to a strict budget. This adds to the stress.
But what about any other tricks and hacks you can use to get a better score? Here are three lesser-known, low-stress ways to improve your credit.
1. Lower your credit utilization rate.
You need better credit to get loans for a car, a home, or schooling. When you apply for a loan, the lender will figure out how risky of a borrower you are, and this is where your credit utilization rate factors in.
Your utilization rate is how much you owe versus your credit limit. If you have credit card with a limit of $1,000, and your current balance owed is $800, you have an 80% utilization rate. Aim for a rate less than 50%, and ideally, below 30%.
One way to achieve this is to look into extra credit cards with a quick approval process. Bu adding an extra card or two to your available limit, you’ll automatically be lowering your utilization rate.
The key here is to avoid adding to your balance. Therefore, you should think twice about this if you have trouble controlling your spending.
2. Become an authorized user.
Many parents help their kids start off with a decent credit history by making them an authorized user on their credit card accounts. You can do the same if you have a trusting family member willing to add you. This will link your name and history to their account – an arrangement that can benefit both of you, provided it’s done right
If you run up a big balance on this card and don’t pay it, it will affect both scores. Similarly, if the account holder stops paying off their balance, it can blow back onto you.
Only agree to do this if their account is in good standing, there’s an excellent foundation of mutual trust, and you promise to avoid overspending. Also confirm that that particular credit card company reports on authorized users.
3. Wait it out.
Are old debts and bankruptcies haunting your reports, bringing your score to downright scary levels? You will eventually be “forgiven” for past mistakes. Things like late payments and foreclosures usually only stay on your credit report for seven years. Bankruptcies generally stick around for ten.
Read up on this, and then take a close look at your credit reports. If you see any negatives that should have aged off of your credit report, contact the bureau in question for removal.
Don’t forget to check your state’s statute of limitations on how long judgments can appear on your report, either.
Rebuilding your credit can take time. But if you implement a few different strategies at once, you can see your score soar faster than anticipated. Add to your credit limit to lower that utilization rate, think critically about piggybacking onto someone else’s good history, and make sure that old negatives fall off your reports when they’re supposed to.
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