1. Make payments on a regular basis
It is highly recommended that you make micropayments during the month in order to keep the balance on your credit card as low as possible. By doing this, it improves your credit utilization which positively impacts your credit score. The more payments you make throughout the month, the lower your credit utilization will be which will improve your score almost immediately. This is a much better approach than simply waiting to make a payment on the due date. It is easy to track your personal credit utilization for your credit card by going on NerdWallet and looking at your credit profile.
2. Dispute and clarify any errors on your credit report
If there is an error on your credit report, then this could be lowering your credit score.
You are supposed to be able to get a free credit report every year from TransUnion, Equifax and Experian which are the largest credit bureaus. You can easily submit a request for one of these reports on AnnualCreditReport.com. Once you have received the report, be sure to thoroughly check it and look for any errors or mistakes. For example, you should look for payments that you paid on time but were mistakenly marked as paid late.
Once you have identified any errors, be sure to dispute them so that they could be removed. After you report the errors, the credit bureau will respond by 30 days.
3. Get a higher limit on your credit card
You can lower your credit utilization by increasing how much credit your card has while ensuring your balance remains at the same level. This is very simple to do by talking to your credit card issuer and simply asking for a bigger credit limit without needing to go through a hard credit inquiry. There are many credit card issuers who will be more than willing to help, especially due to the Coronavirus pandemic. By getting a higher credit card limit, you will be able to quickly drop your score.
Check out NerdWallet’s guide to Coronavirus and learn more about how you can gain peace of mind by properly handling your finances, mortgage and other expenses.
4. Avoid closing cards
When you close a credit card, you will automatically lose that card’s credit which will hurt your credit utilization score and your overall credit score. So, closing cards will not help you to improve your credit profile and it is best to keep the card and only use it every now and then so it wouldn’t be closed.
5. Gain authorized user status
If you have a close relative or even a friend that has a high credit limit and are known to be quite responsible in their card usage, then you should ask if they would consider placing you as an authorized user on their card. Now, they don’t need to allow you to use the card if they don’t want to since just being placed as an authorized user will greatly benefit you.
This is a good idea if you don’t have much credit experience. It can help to improve your credit file, lower credit utilization and provide you with a lengthier credit history.
6. Improve credit worthiness by mixing things up
In the event that you have specific credit cards for particular things such as one card for a loan, then it is worth getting other types of credit. Check this car finance eligibility checker. This will improve your creditworthiness and improve your score.