Monday, April 15, 2024

Simple Little-Known Tips to Improve Your Credit Score in 2020

If you want to improve your credit
score, you’re in the right place. There are a lot of ways you can boost your
credit score – and there are a few techniques and methods that you may not even
be aware of! So, in this guide, we’ll take you through a few top little-known
tips that can help you boost your credit score in 2020. Read on and get all the
details!

1.
Completely Pay Down Your Credit Cards Every Month

If at all possible, you should
always pay your credit cards in full every month – rather than making minimum
payments on your credit cards. Why? Well, the most obvious benefit is that
you’ll save money on interest. If you pay your credit cards each month in full,
you won’t pay a dime in interest – and that’s money you can save for other
purposes!

But beyond this, paying down your
credit cards completely has a benefit for your credit score, too. It reduces
your “credit utilization,” which is a big factor in your credit score.
Basically, if you have a $10,000 credit card limit, and you have $5,000 of credit
card debt, your credit utilization is 50%.

But if you have a $10,000 limit
and pay your cards off in full every month, your utilization rate is 0% – and
lower is always better when it comes to credit utilization. A low credit
utilization rate means that you’re consistently paying your debts down on time
and can help boost your credit score!

2.
Set up Automatic Payments for All of Your Bills

Another major factor in your
credit score is on-time payments. According
to consumer credit company FICO
, a single
30-day missed payment could drop your score by up 100 points or more.

So how can you eliminate the risk
of late payments? We recommend setting up automatic payments for all of your
bills – from health insurance to car insurance, rent or mortgage payments,
credit cards, utilities, and any installment title loans or short-term loans you may
have.

If your payments are automatically
taken from your account every month, you’ll never have to worry about a late
payment again – and you can boost your credit score!

3.
Never Close Down Unused Credit Cards

If you pay off a credit card, you
may be tempted to close the account, particularly if you don’t plan on using it
again. But this is a mistake. The length that your credit accounts have been
open is a major factor in your credit score.

For example, if you have two
credit cards – one that you opened 3 years ago, and one that you opened 7 years
ago, the average length that they’ve been open is 5 years. But if you close the
7-year-old account, the average length drops to 3 years – which can negatively
affect your credit score.

So instead, don’t close the account – as long as it does not have an annual
fee, you can use it to make an occasional purchase and then pay it off right
away. This will help boost your credit score as the length of your open
accounts continues to increase.

4.
Enhance Your Credit MIX with Different Types of Loans

If you only have one type of loan
or credit card, you may have a bad “credit mix.” This term refers to the
different types of loans that you have now and have had in the past.

For example, a good credit mix may
include two credit cards, a mortgage, a personal loan, and a car loan. There’s
a good variety of different loans in this mix, so you will have a higher score.

In contrast, if you only have a
single student loan and no other credit, your score may be lower, since you
have not shown your ability to take out and repay different types of debt.

If you need to improve your credit
score, taking out an auto loan, short term loans for a home improvement
project, or other types of instalment loans can be a good option.

However, you should never take out
a loan unless you need it, so don’t just take loans to try to build your credit
score. Make sure you’re making a good financial decision before you decide to
borrow money.

5.
Check Your Credit Report for Inaccuracies & Errors

You can request a copy of your
credit report for free each year from Annual Credit Report. You should always
check your credit report and see if there are any inaccuracies – such as late
payments that you actually made on time – and submit a request for correction.

If you manage to find any issues,
correcting inaccuracies and errors on your credit report is a great way to
quickly boost your credit score.

Follow
These Tips to Enhance Your Credit Score in 2020

With these simple steps, you can
improve your credit score and qualify for better rates on loans and credit
cards in 2020 and beyond. So, take another look at these tips now, and think
about how you can use them to boost your credit score today.

Sam Allcock
Sam Allcockhttps://www.abcmoney.co.uk
Sam heads up Cheshire-based PR Fire, an online platform that has already helped over 10,000 businesses to grab widespread media coverage on their news at an extremely accessible price point.

Recent Articles

Related Stories

sakarya escort bayan Eskişehir escort bayan