15 Strange but Effective Ways to Boost Your Credit Score

Your finances include more than just money; they reflect your life, choices, and goals. While we all want to achieve financial stability and success, sometimes the path to improving our economic health regarding credit scores seems unclear.

To help you take control of your financial future and boost your credit score, we’ve compiled 15 strategies and techniques.

1. Pay Bills on Time

Paying bills on time is crucial because your payment history is one of the most significant factors that affect your credit score. Late payments negatively impact your credit score and stay on your credit report for up to seven years.

When you pay your bills on time, it shows creditors that you are responsible and reliable in managing your finances.

2. Don’t Close Old Accounts

Businessman with credit card — Image Credit: Shutterstock.

Old accounts add to the length of your credit history, which is an essential factor in determining your credit score. The longer your credit history, the more reliable you appear to creditors. Closing your old accounts reduces the available credit limit, potentially increasing your credit utilization ratio and negatively impacting your credit score.

Instead of closing old accounts, keep them open and occasionally use them for small purchases.

3. Regularly Check Your Credit Report for Errors

Errors on your credit report can negatively impact your credit score and may indicate potential theft or fraudulent activity. Common mistakes include incorrect personal information, such as outdated addresses and misspelled names.

Inaccurate account information, like incorrect payment history, is also a standard error.

4. Use a Mix of Credit Types

Lenders and credit scoring models consider various types of credit when assessing your creditworthiness. These credits include installment loans like mortgages and auto loans and revolving credit accounts like credit cards.

A diverse mix of credit types shows you can manage different kinds of credit responsibly and may improve your credit score.

5. Be an Authorized User on Someone Else’s Credit Card

If someone else permits you to use their card, this can improve your credit score, especially if the primary cardholder has responsible credit habits.

As an authorized user, you benefit from the cardholder’s credit history and account activity appearing on your credit report. This can include the length of their credit history, on-time payments, and low credit utilization, all of which can positively impact their credit score.

6. Apply for Credit Sparingly

Couples discussing about monthly bills — Image Credit: Shutterstock.

When it comes to applying for credit, less is often more. Each time you apply for a new credit account, a hard inquiry is added to your credit report. These inquiries can temporarily lower your credit score and may indicate to lenders that you’re seeking credit from multiple sources, which could be a red flag.

While it’s essential to have access to credit when you need it, applying for it sparingly can help you maintain a healthy credit score. Before applying for a new credit card or loan, consider whether you genuinely need it and are likely to be approved based on your credit profile.

7. Consider a Credit Builder Loan

A credit builder loan is an installment loan designed to help individuals build their credit history. Unlike traditional loans, the funds from a credit builder loan are held in a savings account or certificate of deposit until the loan is fully repaid.

This type of loan allows you to establish a positive payment history, which is crucial in determining your credit score. Also, these loans help you diversify your credit mix, contributing to your credit score.

8. Keep Your Credit Utilization Ratio Below 30%

Your credit utilization ratio is the amount of credit you use compared to your total available limit. Keeping this ratio low demonstrates to lenders that you’re not relying too heavily on credit and can manage your finances responsibly.

To keep your credit utilization ratio between 30%, pay down existing balances and request a credit limit increase on your existing accounts. However, be cautious when requesting credit limit increases since it can result in a hard inquiry in your credit report.

9. Set Up Automatic Payments

Setting up automatic payments for your credit cards, loans, and other bills can help you avoid late fees, penalties, and negative impacts on your credit score.

Monitoring your accounts regularly after setting up automatic payments is essential to ensure they are processed correctly. If your financial situation changes or you need to adjust your payment settings, you can easily do it through your account settings.

10. Negotiate for Lower Interest Rates With Creditors

If you have credit card debt or loans with high interest rates, contacting your creditors and requesting a lower rate can help you save on interest charges and pay off your debt more quickly.

Start by gathering information about your current interest rates and researching competitive rates offered by other lenders. This information will strengthen your position during negotiation. Next, contact your creditors and explain your situation. Be polite and respectful when describing why you’re requesting a lower interest rate. This could include factors like your history of on-time payments, your loyalty as a customer, or financial hardships.

11. Use a Credit Monitoring Service

A credit monitoring service helps you stay informed about your credit status and protects against identity theft. These services can also take proactive steps to maintain a healthy credit profile for you.

Credit monitoring services gather this information by tracking your credit report from one or more major credit bureaus: Equifax, Experian, and TransUnion. When selecting a credit monitoring service, research your options and choose a reputable provider with a track record of reliability and security.

12. Request a Credit Limit Increase

A higher credit limit can lower your credit utilization ratio, improving your credit score. When you request a credit limit increase, your credit card issuer will review your credit history, income, and payment history to determine if you qualify for an increase.

If approved, you’ll have more credit access. This will provide greater flexibility in managing your expenses and handling unexpected needs.

13. Utilize Balance Transfers Wisely

A balance transfer involves moving high-interest credit card debt from one card to another with a lower interest rate. The lower rate is usually a promotional rate offered by the new card issue. This can help you pay off your debt more quickly.

However, make sure you carefully review the terms and conditions of the new credit card offer before initiating a balance transfer. Also, calculate whether the potential savings outweigh the costs of the transfer to ensure it’s a good move.

14. Pay More Than the Minimum Balance on Credit Cards

While making the minimum monthly payment keeps your account in good standing, paying more can help you pay your debt more quickly. When you only pay the minimum balance on your credit cards, a large portion of your payment goes toward covering interest charges. In contrast, the smaller amount goes toward reducing the principal balance. This results in a long repayment timeline.

By paying more than the minimum balance each month, you can chip away your principal balance faster and reduce the amount of interest you’ll pay over the life of the debt.

15. Avoid Closing Credit Cards With a Balance

When you close a credit card with a balance, you reduce your available credit limit, increasing your credit utilization ratio. Also, closing a credit account can shorten your credit history, contributing to your credit score.

Instead of closing credit cards with a balance, consider paying it off in full. You can also transfer the balance to another credit card with better terms.