In todays world, a high credit score is more important than ever. A higher credit score can make all the difference if you're trying to buy or rent a house, lease a car, or even negotiate a lower loan rate. To help you boost your credit score in 2023, here are 5 sure-fire things you can do to get your score up.
Credit fraud and identity theft will dramatically lower your credit score, along with other personal headaches. Credit card companies have realized this, and now scan the web periodically, measuring your risk/threat level. If your personal information is being sold all over the web, this could really ding your credit score.
Just like there are "data brokers" online, there are now "data cleaners." These websites will scan the web for your personal information, and clean it off the internet. This increases your online safety, and greatly reduces your risk of being targeted for identity theft or credit card fraud.
Over the course of a year, your credit score will reflect your diminishing online risk and go up. Not to mention, what if you had your identity stolen or credit card stolen because you were too lazy to clean your data off the internet. Simply preventing that is worth the low cost of the data cleaner.
Privacyon.com the most popular data cleaner. They have the best web crawler and will find and remove your personal information quickly. I personally use privacyon.com to remove my information from the internet, and I can assure you my spam calls have gone down and my credit score has gone up.
If you have a friend or family member with a really high credit score, ask them if you can become an "authorized user" on one of their credit card accounts. This is a quick hack that will add their good credit history to your credit history. The best part is it works fast too. Once the credit card company reports you as an authorized user to the credit bureaus, your score will reflect the change in a positive direction. This is a great way to boost your credit score.
Every credit card comes with a limit. The percentage of your card that is unpaid is called your credit utilization. Credit bureaus and card companies monitor every persons credit utilization. If your credit utilization is higher than average, you will be considered more "risky", and will be docked points on your overall credit score.
A good strategy to boost your credit score and keep it high is to maintain a credit utilization of 30% or less. This requires knowing what your limit is, so don't be afraid to ask. Once you know your limit, make sure to stay below the 30% threshold. You can do this by paying off your card before it is due, or by reducing your monthly spending.
This is a very quick and actionable way to boost your credit score. Piggybacking off of step 3, keeping a low credit card utilization, this step allows you to utilize less of your credit limit without changing anything. By receiving a higher limit, your credit card utilization won't be as high as it was before, even if you're still spending the same.
For example, if your old limit was $10,000 and you utilize $5,000 of your credit at any given time, then your credit card utilization is 50%. But if you are able to get your credit card limit from $10,000 up to $20,000, and you're still utilizing $5,000 at any given time, your credit utilization has now dropped to 25% overnight. Although you're doing nothing different, you will now be perceived as "less risky" and your credit score should begin to go up.
Credit card companies have a long memory, and even one late payment can affect your credit score for up to 7 and a half years. None of the above strategies will help you if you miss payments.
It's the most surefire way to build a strong credit score is to make your payments on time. This means, never spend more on your credit card than what you can afford to pay off. If you're new to building credit, then start small. Only use your credit card for things like gas, groceries, or other small costs that are easy for you to pay off. Then slowly build your monthly spending to a level that you're comfortable with. This will help you build a strong credit score over time.
If you suffer from a low credit score and are trying to repair it, then it's crucial that you only spend what you can pay back. A great strategy is to put small recurring billing payments on your card so it's easy to pay off every month. Things like Netflix or privacyon.com are great cheap services you can add to your card because they're easy to pay off.
This will help rebuild your reputation with the credit bureaus and credit card companies.