5 Ways to Boost Your Credit Score Starting Now

Being denied a loan for a home or a car (or anything) can feel like a punch to the gut. But no matter how you got to the place where you don’t qualify for the best APR rates, or how long your credit has been less than ideal, all is not lost. Boosting your credit score can start right now. There are strategies you can take to begin building your credit back up. Yes, it may require some time and lots of patience on your part, but you won’t regret the effort. Here are a few suggestions to bump up your credit starting now:

1. Get Your Credit Score and Report and Dig In

Knowledge is power. You are entitled to a free credit report and score anytime through our partner SavvyMoney. Pulling your credit information, which is like a report card for how you handle money, won’t impact your score. It’s also a good idea to request a report from the bureaus (Experian, Equifax, and TransUnion) frequently so you can make sure no errors are showing up on individual reports. (You are entitled to a free copy of your credit report each week.)

• Report Errors. About 20% of all credit reports have mistakes, so you need to scour the document to ensure everything is in proper order. If you see anything on a report that’s not correct, report it. A mistake could mean a lower score, even if you did nothing wrong. The Federal Trade Commission has noted an increase in credit report errors reported by consumers.

2. Automate to Avoid Late Fees

Your credit score is largely based on your payment history, which accounts for about 40%. Scores range from 300 to 850; the higher, the better. Here’s the thing: Even one late payment on a credit card can lower your score by as much as 100 points. That’s huge. And that’s why it’s so important to pay your bills on time, or even early, every single due date.

• Autopay. One way to do this is to set up automatic payments in Digital Banking. Make it easy on yourself. You can do this by setting up electronic calendar reminders on your smartphone, tablet, or laptop to help nudge you to pay your bills a day or so early.
• Mark Your Calendar. If you are old school, put a big red dot on the paper calendar in your kitchen or office, tape a note to your bathroom mirror, or find some other clever way to remember.

3. Pay Down Debt

Lenders don’t want to see sky-high balances on your credit cards. That means making an effort to:

• Pay down balances if you carry a balance.
• Refraining from maxing out your cards if you can help it.
• Owning more than 30% of your credit limit can be a red flag to potential lenders.

Note: You should aim to use between 10% and 30% of the total credit available.

4. Use It or Lose It

If you don’t use a credit card for six months or longer, your credit card issuer could cancel the account. This could ding your credit score. If it was the card you held for the longest period of time, that’s a double whammy because the longer your relationship with your lender is, the better it is for your score.

• Keep it Current. To keep an unused card current, make a small purchase once a month, then immediately pay the bill.

5. Consider a Secured Credit Card

If you get turned down for a traditional credit card because of a low credit score or no credit history, you can try opening a secured credit card. This type of card allows you to give the card issuer a certain amount of money upfront, which becomes your credit limit. Over time, perhaps after 18-24 months of good usage and payment behavior, many secured cards will transfer to a regular credit card.

Columbia CU Has Your Credit Score and More

Staying on top of your credit has never been easier with our partner SavvyMoney. With one powerful tool, access your credit score, full credit report, credit monitoring, financial tips, and education. You can do this anytime and anywhere, for free. All you have to do is log in to Digital Banking. Learn more about SavvyMoney here.