6 Tips For Bumping Up Your Credit Score

I’ve been asked about credit tips a few times since starting this blog so I figured I’d knock out 2 birds (actually 4 emails) with one stone… 🙂

I’m always up for getting ahead financially when I can, and a good credit score can be a good place to start. However, I haven’t had a need for a credit check for a while and don’t see an immediate need to have one, but I do know how to keep it in good working order just in case I DO need to use the score…

Monitor your credit report and dispute errors

Any errors in your report will pull your score down. Make sure that when you get your annual report, that it is error free.

Keep your old accounts open

In my bad decisions I’ve made in my finances I mentioned I closed my oldest credit card because I wasn’t using it. It was my first card I had ever opened. Bad idea because it showed I had credit for a while and it helps your score to show this. Scoring models look at not just how to use credit today but also how long you have used credit.

Don’t use all your available credit

Keep the balances under 35% of the total amount you’ve been allotted. Using this all up can cost you points.

Stay away from new credit unless you really need it

I have fallen for this myself at major sporting events here in Seattle. They’ll offer shirts or hats in the cold weather, and it seems like a good idea at the time; however, multiple applications can detract from your score. Department stores are another offender of this. Stay away unless absolutely needed.

Don’t shuffle your balances around

I know there are a lot of sites out there advocating this, but this can have an adverse effect on your score. Like the point above, you’re opening new accounts to consolidate your debt, which contributes to dragging down the ol’ score.

Know the going interest rates

If you ARE going to utilize your credit score, make sure you know the numbers. If you have a good credit score but are not offered a good interest rate, ask questions, negotiate, or shop elsewhere.

Filed Under: adviceCreditCredit CardsDebtfinancial educationReaders Requests

  • We do try to order a copy of our credit reports every year, and we carefully examine them. A few years ago, my husband went through a small-scale identity theft (a single fraudulent account was opened in his name), so we are definitely aware of how important it is to monitor our credit reports.

    Vered’s last blog post..4 Tips for Protecting Your Money in a Slowing Economy

  • TC

    I am building my credit again following a bankruptcy when I was young and foolish. So far, I have been able to get little credit, and you have to have credit to get credit, it seems. I have a finally gotten a not-great credit card, but I charge exactly one bill on it and pay that religiously before the due date. This in itself raised my score from 633 to 655 in 2 months. Yippee! But now, I want to escalate that. My plan is to take the tax stimulus thingie and open a savings account, then get a personal loan for that amount and put the loan also in savings and pay that religiously, more than the minimum before each month’s due date.

    I’m hoping that this will boost my score a little for very little cost to me (under $20 in interest, I figure.) I dunno, though. I work at the bank where I would be trying this, and I think I might just go to the loan officer and tell him that I’m doing it to raise my score. Again, i don’t know. Perhaps honesty is not the best policy. Well, all that can happen is that he says no, or my little scheme doesn’t help me at all. I can’t think of much more to do, though. I have a house, no need to get a mortgage. Can’t afford a car at the moment, and frankly, when I do get one, I will be paying in cash.

    Hey, maybe I don’t need to raise my score!!

  • Actually you should go even further if you can with balances. 35% isn’t a magic number for debt to available balance ratio. If you have less than 10% usage, you will get a better score than if you have a 30% usage.

  • My one caveat to the new credit thing is times where you might want to do a balance transfer to really transfer a balance or make money off of a 0% transfer.

    Jesse’s last blog post..Starbucks Vs Gatorade Vs Gas: wow

  • Pingback: Making Money Journal » Friday Link Love()

  • Pingback: Carnival of Credit Report Stories, April 28, 2008 — Money Under 30()

  • Dispute those errors and dispute those inquiries! I don’t recognize half of the inquiries on my credit report and demand that they provide documentation that I authorized them.

    ideal4investors’s last blog post..Are You Upside Down in Your Property?