Like it or not, your credit score matters. When you want to access credit, apply for mortgage, or even subscribe to a mobile plan, your credit rating will be checked beforehand.
Although we all know the importance of good credit, maintaining a good score is not as easy as some make it out to be. After all, there are countless ways to lower your credit score, many of which have nothing to do with your own financial prudence.
For example, simply submitting a credit check for a car mortgage can instantly knock a few points off your score, although it’s not your fault at all. If this all seems a little unfair to you, we’re here to help you outsmart the system. Here are some very simple ways to maintain or improve your credit score.
Always opt for a soft check
As mentioned, submitting to a mandatory credit check for a mortgage can cause the lender to put “hard” pressure on your score, which will instantly lower your FICO by a few points. However, this is not always inevitable. For example, if you’re looking for a mortgage and want to assess your eligibility without sacrificing your score, you can use the online mortgage broker Trussle to get a “mortgage in principle” (MIP). With this, you can know exactly what mortgage you qualify for without damaging your credit since the MIP can be obtained via a ‘soft’ credit draw which will not affect your points at all.
Increase your credit limit
This one may seem counterproductive, but that’s how the credit system works. You can increase the credit limit on your cards in seconds, usually via a request to your online banking partner. By increasing your maximum credit limit, you can change the way bureaus rate you, because a higher limit means you can be sure to pay on time. Of course, only do this if you are 100% confident that you will be able to meet your new limits and be able to pay off your balance in a timely manner.
Run an error check
More often than you might think, credit agencies get it wrong. In fact, more than a third of all Americans have errors on their credit reports. If your credit score is low, it is quite possible that it is due to an inaccuracy. Fortunately, you have the right to call your credit bureau for free and ask them to perform an immediate error check. This should only take a few minutes and could very well increase your score considerably.
Time your payments
Finally, it’s important to be strategic with your payouts. If you have mortgage payments or use a credit card, always pay off your balance before the end of the billing cycle. If you leave it until the last moment, the agency is more likely to see you as dragging your feet and penalize you for it. Also, always use less than 30% of your credit card limit if possible, as this will have a significant positive impact on your score over time.
Credit scores can seem complicated and inexplicable, but making a few effortless tweaks can keep your score in the green. Try them today to see how you can increase your score.