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How To Increase Your Credit Score. You may not think about how to improve your credit score until you try to rent a car or apply for a loan or a credit card. Then, you might ask: “Why do I need good credit score?” If your credit score is low, lenders will not allow you to borrow money or offer you favorable terms or lower interest rates.

You will be surprised to know that a good credit score can save you hundreds or thousands of dollars in a car loan or a credit card. For an entrepreneur, a good credit score can add tens of thousands of dollars in interest rate savings on long-term loans.

There is something else you should consider: when applying for a commercial loan, your personal credit score can be as important as your commercial credit score. What if we told you that you can increase your personal credit score 60 points in 60 days? Wouldn’t you want to take the necessary steps to make positive changes in your credit score?

15 Tips to increase your personal credit 60 points in 60 days

Tip 1: Report your rental
Do you think by accessing your credit is the only way to build your credit history? You’re wrong! If you are renting a property, surely the property manager is not reporting your rental payments to the credit bureaus. We have seen members of Camino Financial who, when they started reporting their rent, have experienced an increase in their credit of more than 50 points, in just a few weeks!

The trick here is to be proactive when reporting your rent directly to the credit bureaus. The cheapest way to do this is to contact the property manager and credit agencies to report the rent. The fastest way to do this is to work with the agencies in charge of reporting credit, which in turn communicate with the credit agencies. Use this link to the Experian website : in it you will find more information on how to report your rental.

Tip 2: Get a secured credit card
A secured credit card is not the same as a prepaid debit card. A secured credit card is a credit card that you open with a bank or credit card provider, and to obtain it you need to leave a security deposit of about $200 (to be returned when you close the card). On these credit cards, the annual percentage rates (APR) vary from 9.99% to 18.95%. This is an effective way to build credit especially if you don’t have a credit history or if you have bad credit. If you already have a credit history, you can request an unsecured credit card that doesn’t require an initial deposit.

Do you want to know a good trick to increase your credit score by means of a credit card? Do not open many lines of credit at once. You may be excited and want to get several credit cards. Do not do it! Credit bureaus will penalize your credit score if you request credits from several creditors in a short period of time. If you want advice, start with just one credit card.

Tip 3: Buy electronic devices in installments
The next tip is to buy an electronic device (or something similar, like an appliance) in installments. We don’t recommend this if you already have a credit history, but it can be a great way to build credit if you don’t have it.

Clarification: This does not mean that you should open a credit card at the place of purchase. What I recommend is to pay electronic devices in installments. Buying them with a credit card can hurt your credit if you exceed 30% of the credit limit (we will see it in tip 8). However, paying in installments helps you build credit. So make sure that you can pay in installments what you buy, and that the store where you make the purchase reports these payments to the credit agency.

Tip 4: Pay your bills on time
This important tip will prevent your personal credit score from plummeting. Bottom line: make sure you make timely payments to your creditors. Lenders know that you are solvent and trustworthy when you pay your debts on time. They do not want to see notes on your credit report that indicate that you do not pay for public services, telephone bill, rent and other financial obligations. Consider setting up automatic payments or receiving alerts on your smartphone to always pay your bills on time. Read these other recommendations on how to pay your debts quickly .

Tip 5: Consolidate your credit card debt in a installment loan
If you have already exceeded the 30% limit on your credit cards, you need to evaluate the options you have to consolidate your credit card debt into a single installment loan.

Finding lenders who are willing to refinance your credit card debt is not as easy as it seems, but here are some options to apply for:

  • Banks or credit unions
  • Online lenders like Aura
  • Here you have a list with the best personal loans

Tip 6: Request your credit report regularly
You can request a free credit report from one of the three major credit agencies , use Credit Karma or ask a representative from your bank to request your report for you. By having your credit report in your hands, you can detect inaccurate information and take steps to correct these discrepancies. In addition, after implementing these tips on how to improve your credit score, you can see how those changes had a positive impact.

See also:   Walmart Credit Cards Reviews 2019

Tip 7: Keep commercial credit lines open for as long as possible
Credit bureaus give creditors a higher score for having credit lines available for a long period of time. This shows them that you are able to maintain a lasting relationship with a creditor, instead of accumulating debts by being forced to close accounts with your creditors. Credit agencies use commercial lines to calculate a borrower’s credit score by reviewing credit limits, the length of time during which the credit was extended, and payment history. They can also see if you make timely payments on your credit line.

Tip 8: Never exceed 30% of your credit capacity
As a general rule, you should never exceed 30% of your credit card limit. The moment you start exceeding this limit, having a credit card will really affect your credit instead of helping you build it. When you exceed 30%, it is a warning signal to credit agencies that you do not have a healthy credit utilization rate (the debt incurred with respect to credit limits). Recommendations from Camino Financial recommend that you stay at 5% to 30% of your credit card limit. This helps you build credit and increase your score. In some cases, your credit score gets a very fast boost when it is the first time you establish a credit history.

Tip 9: Pay your credit card balance each month
Now that you have a credit card, you may think it’s time to buy things on credit. Not necessarily. You must use your credit card to make purchases, but always pay the balance at the end of the month to increase your credit score. Not only will you avoid paying interest, but you will establish a positive payment history that shows that you know how to manage your debts. Here you can learn how to use your credit card correctly to help you increase your credit score.

Tip 10: Limit the number of credit applications you make
Each time you fill out a credit application, creditors ask the credit bureaus for a thorough consultation or verification. These credit checks affect your credit score and remain in your report for two years. On average, each comprehensive consultation can reduce your credit score by 5 to 10 points. Therefore, too many inquiries make your credit score plummet so you could pay higher interest rates when applying for loans and credit cards. In the worst case, a lender could refuse your credit application. Remember: when you apply for a commercial loan with Camino Financial, we only make a non-exhaustive consultation of your credit that will in no way affect your score.

Tip 11: Open a checking account
If you have never established credit, open a checking or savings account at your local bank. If you do, you will not generate credit, but you will be better positioned with respect to a financial institution to obtain a loan or apply for a credit card. They see that you know the best way to handle money when you make a withdrawal or deposit without making an excess account. Once you get a loan and start paying off your debt, you will start establishing your credit history immediately. Keep reading this article to find out which are the best commercial checking accounts available in the market.

Tip 12: Make sure unpaid debts are not sent to a collection agency
Work closely with your lenders in case you suffer a financial crisis and cannot make payments. If you are aware of your situation, they will most likely work with you to establish a different payment plan. They are interested in doing so because most collection agencies resolve unpaid accounts by reducing debt.

Tip 13: Increase your income
Higher income makes your debt-to-income ratio decrease. This helps to make a favorable impression on the lenders when a borrower is about to receive a raise or a large bonus. Getting a raise can even put you in a more favorable position to request a larger loan amount.

Tip 14: Do not close credit cards that you have paid in full
Do not close a credit card account simply because you do not use the card. Even if you are not using credit on unused cards, available credit counts to reduce your credit utilization rate mentioned in tip 8. Therefore, as a strategy to improve your credit score, keep those accounts open!

Tip 15: Emergency funds available
Having a safety mattress is always a good idea. Instead of using your credit cards to the limit when unforeseen expenses arise, you can use your savings. Start building this savings account as soon as possible. Even if you can only contribute between $25 and $50 a month, it’s a good start.

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