Real Estate News

Quick and Easy Ways to Improve Your Credit Score in the New Year

Written By: Jaymi Naciri
Wednesday, January 08, 2020

While there is no magic bean that will raise your score by hundreds of points overnight, there are some tricks that could help you move into the qualification zone or improve your rate, and make sure you dont take another hit by making a silly mistake.

Pay off collection accounts

Some older collection accounts arent worth paying off if youre strictly looking to boost your score. You may be able to pay newer accounts and see a bump in your scoreif you can ensure that the creditor will report the payment to the credit agencies. Financial experts also typically agree that youre better off paying the original creditor, not the collection agency. Your lender should be able to help you figure out your best plan of action when it comes to who to pay, and how.nbsp;

Pay down your balances

The second most important factor in your FICO score is the amounts you owe, which accounts fornbsp;30 of your score, saidnbsp;NerdWallet. In addition to considering how much you owe overall, FICO looks at yournbsp;credit utilization, or the amount you owe as a percentage ofnbsp;your available credit. The higher your utilization, the more likely it is that youll be overextended and may miss payments. Keeping your credit card balance >

Get a credit card

Yes, this sounds like the opposite of what you should do when trying to improve your credit score, but but the right kind of credit can make a positive difference. A credit card can be a 100 free way to build up your credit, as long as you use it responsibly, saidnbsp;Credit Card Insider.

Use Experian Boost

Experian Boostnbsp; is a new product "that allows you to add utility and cell phone bills to your credit file, they said. Most scoring models take into account your payment history on loans and credit cards, how much revolving credit you regularly use, how long youve had accounts open, the types of accounts you have and how often you apply for new credit. If youve been making utility and cell phone payments on time, there is a way for you to improve your credit score by factoring in those payments through a new, free product called Experian Boost.

Dispute Any Inaccuracies on Your Credit Reports

You shouldnbsp;check your credit reportsnbsp;at all three credit reporting bureausfor any inaccuracies, said Experian. Incorrect information on your credit reports could drag your scores down. Verify that the accounts listed on your reports are correct. If you see errors,nbsp;dispute the informationnbsp;and get it corrected right away.

Sign up for automatic payments

Payment history is a huge part of your credit score35 With so much at stake, on-time payments should be a priority. We all know that accidents happen. Setting up automatic payments can help you avoid those oopsies. Some companies, like T-Mobile, also offer monthly savings for setting up automatic payments.

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