A three-digit number has a huge impact on your finances.
Whether you can get approved for a loan or mortgage and the interest rate you’ll pay depend on your credit score. Credit scores can even determine whether you’re hired for certain jobs and the premiums you’ll be charged for insurance.
What is a Credit Score?
Your credit score is a three-digit number, between 300 and 850, which represents how feasible it is that you will pay your bills on time. It represents your credit risk and is calculated with information on whether you pay bills on time, your amount of debt, and the length of your credit history. The higher the number, the better your credit score.
Generally, 670 to 739 is considered a good credit score, and 740 to 799 is very good. Scores of 800 to 850 are excellent credit risks. However, 580 to 699 is fair. With scores in this range, you can borrow money but will most likely pay a higher interest rate. Scores from 579 to 300 are poor.
Also known as a FICO score, your credit score is determined from credit reports to the three dominant reporting bureaus, Experian, TransUnion, and Equifax.
Figuring into your credit score are details from your credit report. When you finish paying off a car loan, pay your credit card bills on time and use far less credit than what’s available, those impact your credit score favorably.
Late payments, charge-offs, and a high debt-to-income ratio will have the opposite effect, making your credit score dive. Getting behind on student loan payments and using 30 percent or more of your available credit will also adversely affect your credit score.
Having a short credit history, something every younger consumer has in early adulthood, can also lower your score.
It may feel unfair if you’re behind on bills to have a credit score that makes borrowing money more expensive at best and impossible at worst, but there are ways to improve your credit score.
6 Ways to Boost Your Credit Score
Giving your credit score a boost, making it rise 50 to 100 points or even more in the short term may seem impossible, but it can be done with a few simple moves.
Signing up for Experian Boost is the quickest way to improve your credit score because Experian Boost gives you credit for all bills you pay on time. From rent and utilities to cable and your cell phone bill, debts paid in a timely manner make your Experian score rise.
By connecting your checking account with Experian Boost, you’ll get credit for on-time payments you’ve already made. You’ll instantly get a boost in your credit score.
Pay Bills on Time
Timely payment of bills including loans and mortgages, credit cards, and others such as utilities, cell phone bills, and more can boost your credit score. Experian Boost gives you credit for bills you’ve already paid on time.
If your payments are late, a better organization could help. Set bills on auto-pay or set up payment reminders to arrive in your email inbox or by text message.
Dispute Credit Card Mistakes
If you see errors on your credit report, dispute them. Once your credit report is cleared of mistakes, you’ll likely see a rise in your credit score.
Pay More Than the Minimum
Getting your credit score higher may depend on lowering your credit card bills. To decrease the amount of credit you’re paying off, you’ll need to pay more than the minimum payment due. This will lower your credit card bill faster.
However, make sure you pay at least the minimum payment due by its due date. Otherwise, your credit score will go downward.
Take Out Another Credit Card
If you’re using a high amount of available credit, a quick way to change that amount is to take out another credit card, which would raise the amount of credit available. Just make sure that you don’t increase your use of credit with the new card.
Shop for the best deal on that additional credit card online. As your score improves, your chances for approval will increase.
Guard Your Identity
Nothing can wreck a credit score like fraudulent charges. You can guard your identity and your credit with a free dark web scan from Experian. Changing passwords and making them less predictable (don't use PASSWORD123) will help, too.
Checking your credit score and bills to watch for fraudulent activity is also a good idea.
Boost Your Credit Score
Giving your credit score a boost has plenty of benefits. You’ll pay less to borrow money, whether it’s through loans, mortgages, or credit cards. You’ll have better chances of approval for new loans, mortgage refinancing, and credit cards, too.
Your car insurance premiums should decrease when your credit scores rise, and with a better credit score, you have negotiating power to access better rates.
Approval when renting a house or apartment is more likely with a better credit score, and employers are more likely to hire those with good credit.
Best of all, you’ll take pride in your money management skills when your credit score rises. The savings a good credit score brings will make paying bills on time easier.
Take the first step in boosting your credit by signing up for Experian Boost today.