Money Smarts Blog
Part 2 of 4: How to raise your credit score in '23
Apr 27, 2023 || Cherish Saathoff, Legal and Recovery Specialist
If you’re looking for more ways to improve your credit score this year, you’ve come to the right place. In our last issue, we dove into the benefits of having good credit, along with a few ways to get on the path to improving your score (setting up a free Experian account, reducing debt and making payments on time).
Hopefully you’ve been able to test out a few methods — and even better if you’ve seen a boost to your credit score these last few months. Still learning the ropes? That’s OK too. With a little patience and focus on creating healthy financial habits, progress will come.
Keep an eye out for fraud
Errors on your credit reports can lower your credit score, so it’s good practice to check each of the three major credit reporting bureaus annually. Here’s the good news: Checking your own credit doesn’t affect it. You’re also entitled to free weekly reports through 2023.
Request your credit report at AnnualCreditReport.com and review for errors or suspicious/fraudulent activity. If you notice something’s inaccurate, file a formal dispute to have it corrected.
Don’t be late
Sometimes, being late is inevitable. A flat tire on the way to work, a family emergency, an unexpected layover … you get the picture. Life happens and usually those things are few and far between. But making a habit out of late payments will send your credit score plummeting faster than the 133-foot drop on The Monster at Adventureland!
I touched on it last time, but it bears repeating: Late payments have a huge impact on your overall credit score. So when life starts to get hectic (hello, summer travel), work smarter — not harder. Set up automatic bill pay for your credit cards and loan payments so you never miss a deadline, even when you’re on vacation. My family spent a week at Disney World during the already busy holiday season last year, but automating my bills before we left gave me peace of mind so I could enjoy the most magical place on earth.
PRO TIP: REMOVE THE LATE FEES In some cases, it’s possible to have a late payment removed from your credit reports. It’s harder (but not impossible) to have it scrubbed if you legitimately paid late. But lenders may be more lenient if you usually pay bills on time, you can show the late payment wasn’t your fault or you’ve recently experienced a hardship, like a medical emergency. It never hurts to ask, and staying calm and polite can go a long way.
Do your homework first
Debt consolidation helps lower your credit utilization ratio, ultimately boosting your credit score. Plus, it puts all your payments in one place so you can keep track of it easier. Do your own homework to make sure the option you choose makes sense, but here are a few to think about:
0% APR Card
A card offering 0% APR (Annual Percentage Rate) is beneficial in a couple ways. Not only will you save money on interest, but zero interest on a balance transfer credit card can make debt repayment significantly faster (and we know from the last issue the amount of debt you owe can negatively impact your credit score).
A balance transfer is a common way to consolidate debt from multiple credit cards and simplify your finances, but it won’t do you any good if you’re not using the new card responsibly. This type of card usually comes with a fee that’s somewhere between 3-5% of the transfer amount, so be sure to read the fine print.
Home Equity Line of Credit (HELOC)
Home Equity Line of Credit (HELOC) is another useful tool to manage debt. Using your home as collateral, you’ll be able to roll your credit cards and/or loans into one low-interest HELOC with the flexibility to pay over a longer draw period (usually 5-10 years after opening). However, if you’re already having trouble making your current payments, find another way to consolidate debt.
Personal loans
Personal loans are another way to reduce the number of monthly payments and potentially save on interest — but they’re not without their own risks. Unless you immediately pay off your credit card balances with your loan, you could find yourself in more debt, with a loan to top it all off. Plus, personal loans can include a variety of fees (application, origination, late payment, etc.).
When it comes to improving (or rebuilding) your credit, there’s a lot you can do. It takes time, but soon all your positive actions will begin to show positive results in your credit — and help you build lasting financial habits along the way.
Part 2 of 4: How to raise your credit score in '23
Apr 27, 2023 || Cherish Saathoff, Legal and Recovery Specialist
If you’re looking for more ways to improve your credit score this year, you’ve come to the right place. In our last issue, we dove into the benefits of having good credit, along with a few ways to get on the path to improving your score (setting up a free Experian account, reducing debt and making payments on time).
Hopefully you’ve been able to test out a few methods — and even better if you’ve seen a boost to your credit score these last few months. Still learning the ropes? That’s OK too. With a little patience and focus on creating healthy financial habits, progress will come.
Keep an eye out for fraud
Errors on your credit reports can lower your credit score, so it’s good practice to check each of the three major credit reporting bureaus annually. Here’s the good news: Checking your own credit doesn’t affect it. You’re also entitled to free weekly reports through 2023.
Request your credit report at AnnualCreditReport.com and review for errors or suspicious/fraudulent activity. If you notice something’s inaccurate, file a formal dispute to have it corrected.
Don’t be late
Sometimes, being late is inevitable. A flat tire on the way to work, a family emergency, an unexpected layover … you get the picture. Life happens and usually those things are few and far between. But making a habit out of late payments will send your credit score plummeting faster than the 133-foot drop on The Monster at Adventureland!
I touched on it last time, but it bears repeating: Late payments have a huge impact on your overall credit score. So when life starts to get hectic (hello, summer travel), work smarter — not harder. Set up automatic bill pay for your credit cards and loan payments so you never miss a deadline, even when you’re on vacation. My family spent a week at Disney World during the already busy holiday season last year, but automating my bills before we left gave me peace of mind so I could enjoy the most magical place on earth.
PRO TIP: REMOVE THE LATE FEES In some cases, it’s possible to have a late payment removed from your credit reports. It’s harder (but not impossible) to have it scrubbed if you legitimately paid late. But lenders may be more lenient if you usually pay bills on time, you can show the late payment wasn’t your fault or you’ve recently experienced a hardship, like a medical emergency. It never hurts to ask, and staying calm and polite can go a long way.
Do your homework first
Debt consolidation helps lower your credit utilization ratio, ultimately boosting your credit score. Plus, it puts all your payments in one place so you can keep track of it easier. Do your own homework to make sure the option you choose makes sense, but here are a few to think about:
0% APR Card
A card offering 0% APR (Annual Percentage Rate) is beneficial in a couple ways. Not only will you save money on interest, but zero interest on a balance transfer credit card can make debt repayment significantly faster (and we know from the last issue the amount of debt you owe can negatively impact your credit score).
A balance transfer is a common way to consolidate debt from multiple credit cards and simplify your finances, but it won’t do you any good if you’re not using the new card responsibly. This type of card usually comes with a fee that’s somewhere between 3-5% of the transfer amount, so be sure to read the fine print.
Home Equity Line of Credit (HELOC)
Home Equity Line of Credit (HELOC) is another useful tool to manage debt. Using your home as collateral, you’ll be able to roll your credit cards and/or loans into one low-interest HELOC with the flexibility to pay over a longer draw period (usually 5-10 years after opening). However, if you’re already having trouble making your current payments, find another way to consolidate debt.
Personal loans
Personal loans are another way to reduce the number of monthly payments and potentially save on interest — but they’re not without their own risks. Unless you immediately pay off your credit card balances with your loan, you could find yourself in more debt, with a loan to top it all off. Plus, personal loans can include a variety of fees (application, origination, late payment, etc.).
When it comes to improving (or rebuilding) your credit, there’s a lot you can do. It takes time, but soon all your positive actions will begin to show positive results in your credit — and help you build lasting financial habits along the way.
