Money Month

10 Little Ways to Boost Your Credit Score, According to Finance Experts

published Mar 6, 2022
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Your credit score doesn’t define you, but it does have lots of impact when it comes to milestones like applying for a car loan or mortgage. Your score is determined by a few different factors, including the length of credit, your payment history, and your credit ratio.

Making payments on time is one of the best ways to keep your credit score in a good place, but there are other small things you can implement into your financial wellness routine to boost your score. These expert tips are a great place to start.

1. Actually look at your credit report.

You can’t improve your score if you don’t know what it is. “Pull a copy of your credit report from each of the three major national credit bureaus: Equifax, Experian, and TransUnion,” says Mayer Dallal, managing director at MBANC. “It’s free once a year. Then, review each report to see what’s hurting or helping your score.”

“This is an important step since your credit score will take the hit for any account-related misinformation,” says Maya Nijhawan, personal finance expert and co-founder of Finch. “Review your credit report at least once a year and dispute any mistakes with the credit bureaus. Approved disputes are usually corrected within 30 days, which can help boost your credit score!”

2. Maintain good credit history and don’t close old cards.

Fifteen percent of your score is determined by your credit history — aka how long you’ve had active lines of credit, whether that’s with loans or cards. 

Closing your paid-off cards can actually ding your score. “A longer credit history improves your scores — and shows lenders you have experience managing your credit,” explains Carlos Medina of ScoreSense. “Consider what the account means to your total credit profile — such as total credit available, credit utilization, and any amount owed on the card — before you decide to close it.” If you have an older account in good standing, keep it open.

Sara Rathner, credit cards expert at NerdWallet, agrees. “Yes, it can feel like progress to get them out of your home, but keeping old card accounts open can be good for your credit score. Instead of closing them, keep them active by putting a small, recurring charge on each, like a streaming service subscription. Then, pay your bills on time each month — you can even set up auto payment to make this effortless,” she says. “This will stop credit card companies from closing your cards due to inactivity.”

3. Have a good mix of credit.

J.R. Robinson, personal finance expert at Credello, recommends having a mix of credit to your name. “Credit mix accounts for another 10 percent of the scoring,” he explains. “Having a mix of credit card debt, installment loans like student loans and auto loans, and mortgage home equity loans that are all in good standing can boost one’s score.”

4. Be strategic about paying down card balances.

Medina says to target the card closest to its limit first when planning your payoff strategies. “It all goes back to your credit utilization rate. Remember, pushing your credit limits hurts your scores,” he says.

5. Don’t transfer balances from multiple cards to max out one.

This may save some money on interest, but if you transfer several small balances to one card, it will impact your credit utilization for that card. “In general, it’s better to have several cards with smaller balances than a single card with a big balance that’s at or near its credit limit,” Medina explains.

6. Use your cards less.

The less money you are utilizing out of your total credit limit, the better, says Bobbi Rebell, personal finance expert at Tally. “If you’re able to, pause using your credit card to avoid taking on more debt and focus on paying down your balance as much as possible.”

7. Try negotiating your interest rate.

If you’ve been with a card company for a long time and always pay on time, consider asking for a better interest rate. “Consumers with excellent to outstanding credit should call their credit card company and seek more favorable rates on high-interest cards,” says Medina. “It never hurts to ask.”

8. Become an approved user on someone else’s account.

If you don’t have a ton of credit history, start building it by joining a family member or partner’s existing account. “By becoming a shared user on their account you may bypass any extra fees,” says Ruth Shin, founder and CEO of PropertyNest. “Just remember to monitor the joint spending and pay your bills on time.”

9. Don’t apply for multiple cards at once.

Those retailer credit cards and their instant deal promises can be tempting, but tread lightly. Having a slew of new credit inquiries hit your credit reports within a short time period is a red flag to lenders indicating that you may have financial trouble and are shopping for credit,” says Medina. “Opening multiple new accounts can cost you a lot more, in terms of lower credit scores, than they will save you.”

10. Be patient.

Credit health is a journey and it takes time to show progress. “You can’t radically change or improve your credit score overnight,” says Dallal. “The best way to achieve a higher credit score is to develop great long-term credit habits.”

This piece is part of Money Month, where we’re covering everything from side hustles to down payments to a beginner’s guide to investing. Head over here to read more!