How’s your credit score? Because whether you prefer cash or credit, the simple truth of our society is this: here in America, everything runs on credit. There are business loans, investment properties, home loans, car loans, and the credit types go on and on. You need credit – and a good credit score – so that you can get the best loans, options, and payment options. That way, your money is working for you, instead of the other way around.
What if your credit score isn’t so hot? Well, that’s a common problem, even for the savviest financial folks. So let’s talk about how we can raise your credit score by using some little-known industry tricks.
Knowledge is power. And in order to improve your credit score, you need to know where it’s currently at. So tap into all of those free credit report methods to find yours.
Here are a few ways (both paid and free) to find out your credit score:
Ask for your credit score (for free!) any time you initiate a loan.
Ask your credit union to check your score – for free. Most will gladly do so once per quarter.
Check it online for free every 12 months at Annual Credit Report
Something to keep in mind is this: there are actually 3 credit bureaus (Equifax, Experian, and TransUnion). And depending on what kind of credit report you get, the report may only reference one, two, or all three of the credit bureaus.
And because not every credit union gets every detail right every single time, you really need to be checking them all on a regular basis to make sure that things are being reported correctly – so that you can lobby for fixes as needed.
That way, you’ll be keeping control of your credit score – and keeping things that could dramatically hurt your credit score in check.
So that’s the first step: to know your credit score. That way, you know where you’re starting and can clean off any inaccurate things that could be dinging your score.
Okay, now that you know your score and are keeping it clean, let’s take a look at your revolving credit AKA credit card usage.
The general rule of thumb that creditors like is for you to keep your credit utilization ratio under 30%. In other words, if your line of credit is $10,000, make sure that you’re keeping your charging expenses to $3,000 or less.
That’s all well and dandy for theory, right? But in real life, there’s another trick behind this one. And this trick isn’t well-known, even among the savviest of financial types.
Here’s the trick: call your credit card and ask them when they report your utilization to the credit bureaus. It’s not a secret and it’s something they should be able to tell you fairly easily and quickly.
Why do you want that information?
Let’s say you have that $10,000 limit. And you had to charge $5,000 on it this month, but you paid it off (or at least down below that 30% rule of thumb). How does your credit card report that to the credit bureaus? If you know when your utilization report gets run – and you paid it off before that – then your credit looks impeccable. But if you didn’t know that date – and you missed the report? It looks like you’re using 50% of your credit. And that’s going to hurt your credit score.
Now, if missing that utilization report date is going to be a regular occurrence or problem, don’t despair! There’s still hope. Call your credit card company and ask them to raise your limit. That way, you’re charging $5,000 on $15,000 (instead of the $10,000) and you’re back to well within that 30% rule of thumb.
Can’t you see your credit score gaining points left and right?
Finally, there are a few types of credit cards that don’t affect your credit. Do you have a true charge card like a true American Express card and you pay off the balance every month? If so, they don’t bother with a utilization report to the bureaus. In other words, you’re free to borrow and pay it off each month without worrying about it affecting your credit score.
Just make sure you’re being responsible with that kind of card. It’s definitely the kind you want to pay off each month!
In other words, by knowing the details of your cards – and the credit agencies, you’re going to be able to rock your credit score – and your business.