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Building your credit score should be a priority for anyone who wants to make a major purchase in the future. Whether it’s a car or a house, you need a good credit score in order to get better rates, and sometimes to even get approved without a huge deposit.
You likely already know what impacts your credit score, so I’m going to show you some cool hacks for increasing your credit score fast.
Join Self Lender
If you need to build your credit fast then Self Lender can be a great alternative to the conventional secured credit card. You sign up for an account and you receive a loan from Self Lender and make small monthly repayments. Remember, this is not a line of credit but a loan.
On your credit report, it’s considered to be a type of installment loan. You only pay a small interest rate and an administration fee when you work with Self Lender.
So, the total cost could be about $100 per year, but you could see your credit score rise by 50-60 points. It’s an investment that’s well worth your time. Plus, once you pay off the loan you get all your money back, which could be used towards your down payment on a house, vacation, or whatever you’ve been saving for.
See Also: Tips for Saving Money Throughout the Year
Join Rental Kharma
Did you know that paying your rent on time can boost your credit score?
Major credit reporting agencies include it as a positive on your report. But the problem is you can’t self-report your rental payments and landlords almost never report your payment history to credit reporting agencies.
That’s where Rental Kharma comes in. For a small fee, they will report your rental payments on your behalf. It’s a simple way to give your credit score a boost.
When I first signed up, within 3 months I had a 60-point boost to my credit score. However, as of now, they only report to Transunion. They are working on being able to report to the other credit reporting agencies and when this change takes place those already paying the rate for Transunion to be reported will be able to stay in their current rate plan while getting the added benefit of having their payments reported to the other credit bureaus as well.
Consider Debt Consolidation
Debt consolidation can be a way to wrangle those debts and convert them into one easily repayable loan. A company like Strategic Financial Solutions will take on all your debts and then you’ll only have to pay back a single loan.
In many cases, this eliminates debts with heavy interest rates. By reducing those interest rates you’ll be paying down the debt, not the interest.
Everyone knows the best way to improve your credit score is to pay down your debts, and debt consolidation is a handy hack for doing just that.
Consider a Side Hustle
Sometimes the reason why debts become toxic is that you don’t have the money to pay down multiple debts at once. Assuming your boss has refused your request for a raise, try a side hustle instead.
With the Internet and the gig economy, it’s never been easier to create a side hustle. It can be anything from freelance writing to crafting and selling your products on sites like Etsy. These days more Americans than ever before are adopting side hustles to put themselves in a better financial position for the future.
By generating more money you’ll have more capital to aggressively pay down your debts. The faster you pay off your debts the faster your credit score will rise.
Plus, it’s a great way to build a profitable business for yourself!
Avoid Taking on More Debt Until You Can Get Utilization Down for Each Card and Loan to 30%
Did you know that if you use more than 30% of your overall credit limit your credit score will decrease? To lenders, high utilization implies that you’re not able to control your spending. It’s a bad sign.
The worst thing you can do is to take on more debt to pay down existing debt. It’s how credit scores get destroyed and how people get into a debt cycle they can’t get out of without filing bankruptcy.
It might work in the short-term, but in the long-term, it’s only going to cause problems. So, focus on reducing your credit utilization. It’s a fast way to increase your credit score.
Last Word – Improving Your Credit Score is About Debt Elimination
The best thing you can do for yourself is to eliminate your debts. Debts are nothing but a burden, however, sometimes necessary. But if you want to see your credit score increase the main thing is to avoid defaulting on debt and get your debts down as quickly as possible.
Some debts are good for building your score, but if you can’t pay them off at the end of every month you have a problem.
What hacks do you have for increasing credit scores?