Disclaimer: The following is a sponsored post by Lexington Law. All opinions are 100% my own.
Did you know that a difference of 100 points in your credit score could potentially save you thousands of dollars during your lifetime?
This is due to the interest rate a person with a 750 credit score would get on a loan versus someone who has a 650 credit score.
And with the average millennial having a credit score of 634, there is plenty of room for improvement.
Below are 6 ways to raise your credit score 100+ points which will make a dramatic difference in your credit score.
Take action now: Before we begin, take action now, and download the FREE Ultimate Financial Planner. Paying off debt and managing your finances can be FUN. Included is a bonus debt thermometer.
#1 Automatic payments
One of the easiest ways to destroy a credit score is by missing payments.
Luckily, we live in a time where we can autopay everything and pay for a bill without even thinking about it.
Becoming an adult is full of responsibilities, and it can be overwhelming to have to manage so many household bills.
In 2019, we can pay for our electric, cable, internet, rent, car, insurance, and pretty much everything else online without having to remember to pay it every single month.
To set up your bills with autopay, all you need to do is go into your bill's settings and set up auto pay or contact support. It takes less than 5 minutes!
#2 Look for errors
Studies show that millions of people have errors on their credit report and don't even know it.
Credit report errors can range from many things, such as clerical errors, improper accounting, or even a misunderstanding.
These aren't just minor errors either, many Americans have serious enough credit report errors that they could be denied a loan or credit application.
Although you have the ability to increase your credit score by paying off bills on time and growing your credit history, fixing the root cause of the low credit score is key.
If you believe your credit report has an error and you aren't sure why I recommend getting assistance from professionals who will act on your behalf for your personalized needs.
The Lexington Law team can give you a free credit report review and recommended personalized solutions that best fit your needs.
#3 Grow credit history
Credit history is how long you've been responsible for debts.
Your credit history stems from several sources, such as credit cards, banks, collection agencies, and governments.
An easy way to grow your credit history is to be patient and pay bills on time.
And if you're thinking about closing a credit card, remember that you could lose the credit history for that card, and it may appear that you haven't had the responsibility of a credit card as long as you really have.
For example, if you were to close out the very first credit card you've ever opened, your new credit history could look substantially different and a lot shorter than it actually is.
#4 Higher credit limit
A higher credit limit can change your credit utilization ratio, which refers to the amount of credit you have used divided by the total credit available.
According to Lexington Law, a hard inquiry may be necessary to increase your credit limit, which can have a downside as explained here:
“A hard inquiry can stay on your credit report for up to two years and may impact your credit score for a year. The impact can be even greater if you have a limited credit history. If you are considering a credit limit increase, seriously think about your request before making it and ask your creditor if it will result in a hard inquiry on your credit report.”
To ensure you keep a healthy credit utilization rate, make sure to pay off your credit cards in full every time you use them.
If you currently have a high credit utilization rate, create a financial plan to pay off your debt.
#5 Open a credit card
Opening a credit card is one of the easiest ways to build credit, as long as you treat your credit card as you would treat actual cash.
For many people, using a credit card is a surefire way to build debt and spend without even really thinking about it.
If you're not sure how you would do with a credit card, open a credit card with a low balance, such as $1,000.
Any time you use a credit card, make sure you pay it off immediately after, as you don't allow debt to build up or interest to charge.
There are many ways to build credit without a credit card, but if you've never had any type of loan or credit card, it may be difficult to show your responsibility with money to creditors.
#6 Create a budget
Creating a budget is a must for everyone, even if you aren't actively trying to increase your credit score.
A budget ensures that you do not overspend.
You'll never ask yourself, “Where did all of my money go?”
A budget is particularly helpful with increasing your credit score because your finances will be organized.
Any time you spend money, you will have it budgeted and there won't be months where you spend more than you actually have.
A budget is a must when using credit cards because you will treat your credit card as cash (since you only have a specific amount budgeted each month) instead of spending without a plan in mind.
Aside from a budget, Lex OnTrack can track and protect your identity, credit, and finances, which notifies changes and updates on your credit score.
Lexington Law has helped hundreds of thousands of clients remove inaccurate and unverifiable items from credit reports such as late payments, collections, charge-offs, and more.
If you need assistance with filing disputes or challenging specific items on your credit report, learn more about Lexington Law here and start getting the help you need today.
Are you working on improving your credit score?
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