Skyrocket your credit score! See how an expert unveils the secret to increasing it by 160+ points!
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Navigating the world of credit scores can often feel like trying to solve an enigma wrapped in a riddle.
For many Americans, especially those of us who have seen the financial landscape change over the decades, understanding the ins and outs of credit scores is crucial.
These scores are the gatekeepers to favorable interest rates on mortgages, car loans, and credit cards, and they can even determine whether you're eligible for credit at all.
In recent times, there's been a noticeable dip in the nation's credit health, with the average credit score in the US falling to 715 from 717, marking the most significant one-year decline since the Great Recession, as reported by FICO.
But fear not! Improving your credit score doesn't have to be a daunting, time-consuming task. In fact, with the right approach, you could see a dramatic increase in as little as a month.
Jenny Groberg, CEO of the accounting platform BookSmarts, has shared some illuminating insights on how to potentially boost your credit score by an impressive 163 points in roughly 30 days.
The secret lies in focusing on the two most influential factors: your payment history and your credit utilization, which together account for 65% of your FICO score.
To empower you with knowledge and practical tips, here’s a breakdown of Groberg's expert advice into actionable steps:
1. Scrutinize Your Credit Report for Quick Wins (+20 points)
Start by obtaining a copy of your credit reports from all three major credit bureaus: Experian, TransUnion, and Equifax.
You're entitled to free copies of your reports, and many banks and credit card companies offer this service to their customers. Once you have your reports, comb through them meticulously for any inaccuracies or signs of fraud.
A Consumer Reports study from 2024 found that nearly half of all credit reports contain errors, some of which are serious enough to impact your ability to obtain credit.
Also read: The hidden debt crisis: see where Americans are struggling the most
These errors can range from incorrect personal information to unrecognized accounts or debts.
If you spot an error, file a dispute immediately. Credit bureaus typically have 30 days to investigate your claim and another five days to inform you of the outcome. Correcting these errors can boost your score by up to 20 points.
2. Pay Down Credit Card Balances for a Major Lift (+100 points)
Paying off your credit card balances is the fastest route to a higher credit score. If your cards are nearly maxed out, paying them down can result in a 60 to 100-point increase.
Remember, timely payments are just as crucial as paying in full. To avoid missing a payment, consider setting up autopay on all your accounts.
Source: Mark Tilbury / Youtube.
3. Ask for Higher Credit Limits to Improve Utilization (+30 points)
Credit utilization, or the percentage of your credit limit that you're using, is a significant factor in your credit score.
Groberg advises keeping your utilization below 30%. For example, on a $10,000 limit, aim to spend no more than $3,000.
If you're struggling to pay down your balance, request a credit limit increase from your card issuer. This can be a straightforward way to improve your score by 10 to 30 points without negatively impacting your credit.
4. Leverage Regular Bills to Establish Credit History (+13 points)
For those with a limited credit history, you can enhance your score by showing a pattern of on-time payments for various bills, such as rent, car insurance, utilities, and even streaming services.
Services like Experian Boost report these payments to the credit bureau, and the average user sees a 13-point increase in their score.
Why This Matters to You
Improving your credit score from “fair” to “very good” can have substantial financial benefits.
According to a LendingTree analysis, this jump could save you as much as $39,000 over the lifetime of your balances. That's a significant sum that could go towards your retirement, travel, or spoiling the grandkids.
Read next: Living on credit: The tough choices many seniors face today
Have you tried any of these strategies and seen results? Do you have other tips for boosting credit scores? Share your experiences and questions in the comments below!
For many Americans, especially those of us who have seen the financial landscape change over the decades, understanding the ins and outs of credit scores is crucial.
These scores are the gatekeepers to favorable interest rates on mortgages, car loans, and credit cards, and they can even determine whether you're eligible for credit at all.
In recent times, there's been a noticeable dip in the nation's credit health, with the average credit score in the US falling to 715 from 717, marking the most significant one-year decline since the Great Recession, as reported by FICO.
But fear not! Improving your credit score doesn't have to be a daunting, time-consuming task. In fact, with the right approach, you could see a dramatic increase in as little as a month.
Jenny Groberg, CEO of the accounting platform BookSmarts, has shared some illuminating insights on how to potentially boost your credit score by an impressive 163 points in roughly 30 days.
The secret lies in focusing on the two most influential factors: your payment history and your credit utilization, which together account for 65% of your FICO score.
Credit scores are essential for securing good rates on loans and credit cards, and a poor score can hinder credit qualification. Image source: CapMapr.nl / Unsplash.
To empower you with knowledge and practical tips, here’s a breakdown of Groberg's expert advice into actionable steps:
1. Scrutinize Your Credit Report for Quick Wins (+20 points)
Start by obtaining a copy of your credit reports from all three major credit bureaus: Experian, TransUnion, and Equifax.
You're entitled to free copies of your reports, and many banks and credit card companies offer this service to their customers. Once you have your reports, comb through them meticulously for any inaccuracies or signs of fraud.
A Consumer Reports study from 2024 found that nearly half of all credit reports contain errors, some of which are serious enough to impact your ability to obtain credit.
Also read: The hidden debt crisis: see where Americans are struggling the most
These errors can range from incorrect personal information to unrecognized accounts or debts.
If you spot an error, file a dispute immediately. Credit bureaus typically have 30 days to investigate your claim and another five days to inform you of the outcome. Correcting these errors can boost your score by up to 20 points.
2. Pay Down Credit Card Balances for a Major Lift (+100 points)
Paying off your credit card balances is the fastest route to a higher credit score. If your cards are nearly maxed out, paying them down can result in a 60 to 100-point increase.
Remember, timely payments are just as crucial as paying in full. To avoid missing a payment, consider setting up autopay on all your accounts.
Source: Mark Tilbury / Youtube.
3. Ask for Higher Credit Limits to Improve Utilization (+30 points)
Credit utilization, or the percentage of your credit limit that you're using, is a significant factor in your credit score.
Groberg advises keeping your utilization below 30%. For example, on a $10,000 limit, aim to spend no more than $3,000.
If you're struggling to pay down your balance, request a credit limit increase from your card issuer. This can be a straightforward way to improve your score by 10 to 30 points without negatively impacting your credit.
4. Leverage Regular Bills to Establish Credit History (+13 points)
For those with a limited credit history, you can enhance your score by showing a pattern of on-time payments for various bills, such as rent, car insurance, utilities, and even streaming services.
Services like Experian Boost report these payments to the credit bureau, and the average user sees a 13-point increase in their score.
Why This Matters to You
Improving your credit score from “fair” to “very good” can have substantial financial benefits.
According to a LendingTree analysis, this jump could save you as much as $39,000 over the lifetime of your balances. That's a significant sum that could go towards your retirement, travel, or spoiling the grandkids.
Read next: Living on credit: The tough choices many seniors face today
Have you tried any of these strategies and seen results? Do you have other tips for boosting credit scores? Share your experiences and questions in the comments below!
