5 Ways To Boost Your Credit Score This Summer
As the saying goes, “nothing is certain but death and taxes”, but so is your credit score.
Whether you need a car loan, a home loan, or more purchasing power, you need to have a decent credit score to be approved for a loan and get lower interest rates.
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I know this is often a topic you don’t want to bring up, but if you take small steps and don’t avoid your credit score, it may be easier to raise it than you think.
Here are 5 ways to help you achieve a better credit score:
1. Don’t Avoid Your Credit Report – You are entitled to one free credit report per year issued by three national credit bureaus – Experian, Equifax and TransUnion. Make sure to order your report and check what shows up. Often times, there can be mistakes in your report that lower your credit score. Make sure there are no late payments, debts, or credit limits that are mistakenly reported. Your credit score is determined by the information on your credit report and plays an important role in which loans you qualify for and the interest you will pay.
If you’re thinking about making a big purchase, like a house or a car, request a copy of your credit report a few months in advance. Also, if you have small unpaid bills like medical bill co-payments that often show up on credit reports, call the medical service provider or collection agency to pay them first and ask them to. withdraw from your credit. You’d be amazed at how much a few unpaid $ 10 co-payments can lower your score.
In addition to getting a free credit score from one of the three credit bureaus, you can also access your credit report for free through Mint. Mint’s free credit report and score simply ask you to verify your identity and once verified you will have your free credit report summary within minutes.
2. Pay off credit card debt – Credit card debts and maximum credit cards are one of the major factors that can lower your credit score. The higher the percentage of your revolving credit that you use, the worse it is for your credit score. Try to keep your outstanding balances below 30% of your credit limit and below 10% is even better.
If you have a lot of credit card debt, make a list of your outstanding credit card balances and pay the lowest first and work your way up to the highest. As you pay off the smaller credit card debt, you can take the money you would have paid from the lower balances you just paid off and put it on the next higher balance. This trick, known as the Debt Snowball Method, really works to help you pay off your debt and boost your credit score. Once you’ve paid off your credit card debt, make sure you don’t close your credit cards, as closing them can lower your credit score as well.
3. Request the elimination of late payments – If there is an unpaid debt that was reported in error or you really forgot to pay an invoice, call the company that reported the delay and request that the derogatory information be removed. The creditor will ask for a letter stating why you were late or why there was an error. They will let you know whether or not they will remove the derogatory information.
If your application is approved, always get approval in writing and keep it for your records. I can’t tell you how many people I have helped with their credit who went out and bought a house and found an old denigration that had been taken out once had reappeared.
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4. Do not clean to charge – Make sure you don’t spend all that time cleaning up your credit and boosting your credit score to get that long-awaited home loan approval, then make a huge purchase on credit.
Lenders make decisions based on your credit score and report at the time of application, but they will run your credit again after you get loan approval, but just before your loan closes. If a new purchase occurs, it can impact your loan. One of my old clients went out and bought a new Corvette after I helped him clean up his credit on his mortgage. The lender managed their credit right before the loan was closed, which changed their debt ratio and impacted their loan.
5. Improve your payment history – With everything that happened last year, you might have difficulty paying your bills. Don’t hesitate to phone your lender or your credit card company and let them know about any challenges you face. Many lenders and credit card companies work with people who have been affected by COVID or other unexpected events. If you have encountered any difficulties and have missed or overdue payments. Once you’ve gotten back on your feet, the best thing to do is start paying your bills on time. The more you pay your bills on time after being late, the more your credit score will increase. Recent good payment models will eventually outshine the bad ones.
Improving your credit score does not happen overnight, but by following these tips you will be on your way to achieving a high credit score, providing you with lower interest rates and more. money in your pocket.
Check out Mint, where you can get your free credit score, a summary of your credit report, and an explanation of how your credit score was calculated.