3 Ways to Boost Your Credit Score
It can be difficult to stay financially afloat in this economy. With high inflation and a bad economy, the financial standing of many individuals in the US is getting worse. One indication of how financially stable you are is your credit score, which is the prime factor on which banks base their decision to give out loans.
Your credit score indicates how responsibly you use credit, which lets them assess the risk of lending to you. A high credit score gets you loans quickly and at a lower interest rate. Your credit score depends upon your timeliness of payments and your credit card utilization. If you have a low credit score, here are some tips for boosting it quickly.
1. Consolidate Your Debts
Your credit score will take a severe hit if you are in debt. Missing out on timely debt repayment due to lack of funds or negligence can lower your credit score, locking you in a cycle that keeps your credit score low.
Consider consolidating your outstanding debts from a bank, so you only have one payment. Doing so will lessen the chances of you missing a payment. Consolidated obligations also lower your overall interest rates, so there is less you have to pay back. They also improve your credit card utilization ratio.
You can also consolidate credit card balances with a balance transfer credit card. Such cards charge you 0% interest rates at an initial promotional period, but you may have to pay between 3% to 5% in transfer fees.
2. Limit Inquiries to Your Credit History
Two types of inquiries into your credit history are soft and hard. A soft search refers to you checking your credit or giving permission to your employer to check your credit score. Checks by financial institutions and credit card companies you already work with are also soft inquiries, and they usually don’t affect your credit score.
Hard inquiries are thorough checks of your credit history when applying for a new credit card, a mortgage, or an auto loan. These inquiries negatively affect your credit score as they suggest you are having financial difficulties. While a single hard inquiry would not majorly affect your credit score, multiple inquiries may. Avoid going for several hard inquiries so close to each other, especially if you already have a bad credit score, as they can damage your credit score for a few months to a year. Go for no credit check loans if you need to raise money during this time.
3. Buy a Tradeline
Buying a tradeline is the nuclear option to improve your credit score quickly. It involves temporarily authorizing you as a user on someone else’s credit card so their credit becomes yours. While it is morally gray, purchasing tradelines in the US is legal. Be careful when buying tradelines: always choose a reputable tradeline provider. You can read a superior tradelines review here to help you decide where to do business.
Endnote
It may feel like all hope is lost if you are in a financial crisis with a low credit score. However, you can improve your credit score with simple tricks. If you have any outstanding debts, consolidate them to lower your interest rate, and go for fewer hard inquiries. Buy a tradeline from a reputable score if you desperately need a better credit score quickly. These practices will improve your credit score and make you eligible for several loans.
Pranab Bhandari is an Editor of the Financial Blog “Financebuzz”. Apart from writing informative financial articles for his blog, he is a regular contributor to many national and international publications namely Tweak Your Biz, Growth Rocks ETC.
