Credit scores are a critical component of financial health. Your credit score determines your ability to make large purchases, buy a home, rent an apartment, and more. Good credit gives you access to the lowest interest rates and most favorable terms on loans and other lending products – ultimately helping you save in the long run.
However, having bad credit can leave you paying more or even being rejected from a financing opportunity altogether.
If you’re looking for a fast, easy way to improve your credit score – look no further. We’ve compiled some easy tips on ways to improve your credit score.
Check if you have credit
The first step is to make sure you have credit. If you’ve just turned 18 or if there isn’t enough information on your credit report – you may not even have a credit score.
In this case, apply for a credit card or credit builder loan to build up credit. With MoneyLion’s Credit Builder Plus membership – you’ll be able to find out if you have a credit history and your exact credit score.
The key to building your credit is to spend 30% or less of your available limit and pay balances responsibly. So long as you do this, your credit history will be off to a solid start.
Double check your credit report
It’s important to be vigilant in reading over your credit report. You should be looking to make sure that everything is properly reported. For example, make sure that there are no late payments that are incorrectly listed and that the amounts owed for each of your accounts is correct. If you come across errors on your credit report, be sure to dispute them with the credit bureau and reporting agency.
Prioritize past-due accounts
Once you have your credit report and you’ve double checked that all the information is correct, it’s time to start looking for past-due accounts. Missed payments are one of the most common reasons for low credit scores. If you notice one of your accounts is past due, allocate all your funds towards paying off what you owe and getting up to date.
Set up multiple credit lines
Different types of credit lines such as car loans, personal loans, or mortgages, show lenders you’re responsible with credit and able to manage different types of payments. If possible, open a new credit line in the form of a loan or credit card. Your score may be hit with a slight dip in the short run. However, so long as you’re making payments on-time – you’ll help boost your credit in the long run.
Pay down your account balance
Another major factor that impacts your credit score is your credit utilization rate. This figure depicts how much credit you’re using compared to your total credit amount. For example, if your credit card limit is $1,000 and your balance is $500, your credit utilization rate is 500 divided by 1000 is 0.5 or 50%. Ideally, you want your credit utilization rate to be no more than 30%.
You can lower your credit utilization rate and boost your credit score by paying down your balance. In order to do this, you’re going to need extra funds. If you don’t have extra money laying around, look for ways to bring in some cash.
Start by budgeting and cutting down on unnecessary spending. You may also want to consider investing in a side-hustle, such as driving for ride-share companies or selling old items, to bring in some funds.
Additional tips on improving your credit score
The 5 tips we’ve provided thus far should help make a sizeable impact when improving your credit score. However, add these two additional tips and you’ll see your credit score soar!
Set payment reminders
One of the most important factors that directly contribute to your credit score is making payments on time. There are many tools available to help ensure that you remember to pay your credit card balance and other bills. Some banks offer reminders (you may have to “opt-in” if you wish to receive these) through their portals and will send you an email or text to remind you when your payment is due.
You can also choose to enroll in automatic payments through your credit card provider. If you do this then the money will be automatically debited from your account. Another option is to simply set a reminder on your calendar or mobile phone.
MoneyLion’s credit builder loan sets up automatic payments and reports your payment activity to all three credit bureaus to help you build credit easily. It also comes with weekly updates on your credit score – allowing you to track your progress.
You can even get your on-time rent, utility, and other payments reported to the major credit bureaus to help improve your credit score with help from our partner LevelCredit.
Utilize a debt pay off strategy
As you pay down your debt, the likelihood of improving your credit score will increase. It helps to use a strategy from different schools of thought to pay down debt fast.
One strategy is to start with the account that has the highest interest rate. Focus on directing your excess funds towards paying off this account while maintaining minimum payments on all other accounts.
Another strategy is to direct your excess funds to the account with the lowest balance while maintaining minimum payments on all other accounts. As you pay off an account, rollover funds towards the next account with the greater balance.
Start rebuilding your credit
Good credit is critical for strong financial health and it’s incredibly important to put the time in towards working on improving your credit score.
For help, make sure to turn to MoneyLion’s Credit Builder Plus members. You’ll gain access to credit monitoring tools, personalized advice, and more. In fact, more than half our members raised their score by up to 27 points within 60 days.
And as a bonus, you’ll unlock up to $1000 in 0% APR cash advances through Instacash. MoneyLion’s very own cash advance product that’s an ideal replacement for high-cost loans or credit cards.
Whether it’s improving your credit score, saving for the future, or accessing 0% APR cash advances – MoneyLion’s got you covered. Learn more about our credit-boosting product here.