Having a good credit score is something that everyone aspires to because this score is one of the most significant factors in determining your eligibility to borrow money. Therefore, if this score falls below a certain point, lenders like banks and credit card companies will have to reevaluate the idea of lending you money or approving your credit card application.
How can you establish a satisfactory credit score? This might be the question that runs through your mind right because right now knowing that having a good score could mean a lot, especially if you are planning to purchase a house, applying for an auto loan, paying mortgages or planning to pay your student loans. It is a fact that the higher your credit score is, the higher your chances are of getting that approved stamp on your loan application form.
At this point, you have done a ton of research on how you can keep your credit score high. However, what you get from Google are only suggestions like establishing a long term credit history to prove your ability to repay a loan, opening and maintaining different types of bank accounts, and never paying your bills past their deadlines. These things are might be a little complicated that they actually sounds.
Yes, they are all plausible, but if you are looking for more unique ways to improve your credit, listed below are 10 unusual yet effective ways of boosting your credit score.
Use your Call a Friend/Family lifeline
If you know that your parents, your brother, your sister and even your friend have better credit scores than you, you might as well take advantage of being their relative to help boost your credit history. Add yourself to their account to improve your own credit score so that when banks and credit companies see that you are associated with someone who has a satisfactory credit record, you instantly become an accredited user who can easily get loan applications approved.
Keep your old credit accounts open
No matter how many credit accounts are under your name, no matter how ancient they may be, whatever happens, do not close them. This is because closing an old, unused account might actually do more harm than benefit your credit score. If they are kept accessible and open, it could show that you are maintaining credit that. Having a lot of open accounts increases your credit limit, which has a positive effect on decreasing the impact of having large purchases in your credit history.
Ask your lender to good-will delete a bad record
It is possible for you to ask your lender or your reporting agency for a good-will deletion when some of your payments run late. There are lots of factors that could delay certain payments such as bounced checks, system errors, and bank complications. By being able to remove these stains from your record, you can have better chances of getting a new loan application approved. You just need to ask politely and respectfully talk to your former lender. If the reporting agency took your excuse into consideration, those blemishes can be removed without a trace.
Settle your credit card bills more than once a month
You also have to remember that debt utilization ratio is one of the most significant factors in determining your credit score. This rate shows your debt in comparison to your credit limit. Therefore, by dropping your debt utilization ratio, you can increase your credit score.
How do you do this? You just have to settle your bills before the month ends or at least limit your credit by at most 30 percent of your total credit limit. Here is a simple trick to lower your debt utilization ratio: pay your credit in small portions more than once a month instead of waiting for a lump sum at the end of the month. If you think that it may be difficult for you to do this, you can ask help from personal insolvency practitioners like Creditfix – Individual Voluntary Arrangement. They can help you deal with your debts more effectively.
Do not create new utility accounts
For you to start anew with a clean slate when moving into a new apartment, you might think about applying for new utility accounts. However, this might do more harm on your credit record than you think. For you to open a new utility account for your phone, electricity, and gas services, your credit must be checked first, and unnecessary inquiries on your credit status can leave a negative effect on your credit score. To avoid this, you can just update your old account’s information and give a notice to your utility provider that you have moved to a different address.
Return borrowed books from public libraries
Who would have thought that that unreturned books you borrowed from a local library could affect your credit reliability rate? Yes, most of the people are not aware of it, but libraries contact reporting agencies about books that are long overdue. They can send these agencies your unsettled bills because of unreturned books, as well as any other fees you may have forgotten to pay. All these can reflect badly on your credit history and can affect your overall credit score.
Stay loyal with your lenders
Having a long-term relationship with your creditors could actually boost your credit scores as this shows your credibility and reliability as a customer. Also, clients who are loyal to their creditors are qualified in the loyalty programs offered by credit companies. This means that the more you build a lasting relationship with your lender, the more likely you are to get rewards and benefits from being a loyal customer. You may get lower interest rates, longer loan durations, and more leeway when settling your payments. As a result, this can have a positive effect on your credit score in the long run.
Do not easily forget about your old debts
Most people tend to immediately wipe off record once they have paid off a previous loan. You do not necessarily have to do this. In fact, doing so could have a negative effect on your credit reputation. Your previous loans are actually a proof that you have the capability to pay them off no matter how long-term they are. Just keep it there and look at how you were able to successfully pay it off. One day, your lenders are going to appreciate it the same way as you do in the future.
Do not look like a risk to your lenders
You should not have unnecessary inquiries about your credit score because you would want to focus more on your payment history and account mix. Also remember that you can be labelled a risk if you open and close accounts frequently, or failing to settle your monthly minimum payments. You should be proud of your payment history and account mix because if you have a clean record, there will be no chance of you being labelled a risk.
Increase your credit frequently
For you to be able to increase your credit score, you must have to make use of your credit line. You should frequently request for a credit limit increase, but not too often. You can ask to increase it on an annual basis for every credit card that you have. Also, take note that your increase should only be 10 percent of your current limit at most. More than that would most likely put you at the risk of getting declined thus, affecting your credit history and score.