5 Clever Ways to Improve Your Credit Score

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Having the highest possible credit score can go a long way when making certain crucial financial decisions, be it refinancing your mortgage, applying for a new loan, or getting a new credit card and can help you secure lower interest rates.

Here are five under-the-radar ways to improve your credit score:

Find Out Your Payment History Reporting Schedule

A major factor impacting your credit score is the “credit utilization ratio”, which is the amount of credit you’ve used compared to the overall credit available. It is usually best to have a ratio of less than 30% with a ratio of under 10% boosting your credit score even more.

These figures are reported to the credit bureaus on a fixed schedule, usually the last day of your billing cycle, i.e. the closing date. However, the closing date can be different from your due date. To improve your credit score, call your credit card issuer and ask them when your balance gets reported to the credit bureaus and make sure to pay your balance before the closing date.

Strategically Pay Down Your Debt

Your credit score is impacted by the credit utilization ratios of each of the credit cards that you have. In the case that you have multiple credit cards with differing balances and credit limits, pay down the card with the higher balance, to improve its ratio and improve your overall credit score.

Make Two Payments A Month

If you find yourself in a situation where you are putting high-value items on your credit cards to get rewards or discounts, remember that it can adversely impact your credit utilization ratio. To make sure that it doesn’t have a large impact on your credit score, make two payments. The first payment, two weeks before the closing date, and the second payment just before the closing date.

Increase Your Credit Limits

Another way to bring down your credit utilization ratio and improve your credit score is to raise your credit limit. You can do this on one or more of your cards. However, this is not recommended if you have a tendency to overspend or miss payments.

Mix Up Your Credit

Getting and paying off different types of loans such as a low rate auto or personal loan can help improve your credit score. This can be a viable strategy if you don’t foresee any large credit requirements in the near future.