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5 Tricks to Boost Your Credit Score

Your credit score is an essential part of your overall financial well-being. Having a good score can give you a better chance of qualifying for credit cards and loans, including mortgages. A higher score may also help you secure lower interest rates when borrowing, which could help you save hundreds or even thousands of dollars in interest payments. While there's no surefire way to boost your credit overnight, there are a few simple steps you can take to improve your credit score, starting today.

#1: Check your free annual credit reports for errors

By law, you're entitled to one free credit report every 12 months from each of the three major credit bureaus: Experian, Equifax and TransUnion. You can access your reports online at It's important to check each of your credit reports to make sure that all the information is accurate and up-to-date. For example, are there accounts or applications on your credit reports that you don't recognize? This could be a sign of identity theft. Are there late or missing payments listed on your reports that you remember making on time? Are there any discrepancies among the three credit reports? Be sure you dispute any errors with the credit bureaus and get them corrected right away.

#2: Set up payment alerts and automatic payments

Perhaps the single most important way to improve your credit is by paying your bills on time. Even one late payment can have a significant negative impact on your credit score. However, the longer you consistently pay your bills on time after you miss a payment, the more your score should increase. Start by writing down the due dates for each of your bills and setting up payment alerts online. You can even set up automatic transfers from your checking or savings account to help ensure you're never late on a payment.

#3: Keep credit card balances low

Your credit utilization ratio is another factor that affects your credit score. It's recommended that you use no more than 30% of your credit card limit each month. If your credit card balance is typically more than 30% of the card's limit, consider pre-paying part of the balance before it's due. Having a low credit utilization ratio tells lenders that you know how to use and manage credit responsibly, without depending on it.

#4: Avoid opening new credit accounts that you don't need

While having a diverse mix of credit accounts is a small part of your credit score, it's never a good idea to open new credit accounts that you don't intend to use in an attempt to raise your score. If you want to raise your score, slow down on applying for and opening new credit card accounts. Too many hard inquiries on your credit report can negatively impact your score, and by opening additional lines of credit, you may be tempted to overspend and create more debt. 

#5: Don't close unused credit accounts

When you're working on boosting your credit score, it may seem like the right move to close any credit accounts that you don't use. However, closing accounts can actually harm your credit score, because it may increase your total credit utilization ratio and reduce your average credit history. Keep unused credit card accounts open – unless they're costing you money in annual fees. If you do decide to close credit card accounts, close newer accounts instead of older ones to avoid making your credit history appear shorter.

Final thoughts

Don't worry if there isn't a noticeable difference in your credit score after you try some of these steps. In general, it takes at least three to six months of positive credit behavior to see changes in your score. Stick with healthy credit habits, and you'll be on the right track to build a better credit score in the long term!

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