For many Americans, the past few months have presented an opportunity to reset relationships with finances and begin a more sustainable relationship with money. According to the latest figures, the average US FICO score surged to record heights in 2021. Higher household savings and stimulus cash have allowed some to pay down their credit card debt and build a high credit score.
However, for millions of others, the reverse is true. If you find that your credit score is still too low, there is no need to despair. You can get the credit you need to access the financial milestones you deserve. All you need to do to boost your credit score is follow these simple steps to boost your credit score and keep it high.
1. Review Your Credit Reports
Before you consult any kind of credit repair service, you need an honest idea of what you are dealing with. All of the main credit agencies in America are obligated to provide a free, in-depth credit report at least once a year.
You can determine exactly why your score is low and the activities you need to be focusing on to build your score. You can look at the sources of debt that are contributing to your low score. Crucially, you can spot identify any errors can demand that your credit agency fixes them. Alternatively, you can use Cambio, a credit improvement app, that will help you identify areas that you can improve on.
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2. Consolidate Your Debts
If you are drowning in debt, you may need professional interventions to help you. You can find out how to settle your various debts through a financial planner here. Any financial planner will inform you that consolidating your debts can make them easier to pay down and get you back on track. You will only have one payment to make and you will likely save substantial amounts of interest.
3. Consider a Credit Builder Loan
It may sound like taking out a loan to boost your credit is a fraught exercise. However, this can be the best way to gain the system. Many financial institutions offer credit-building loans. These are simply loans you pay yourself and then can immediately pay it back. The system will see that you have paid off a large loan and will immediately boost your score. Simple.
4. Review Dormant Credit Accounts
The older you are, the more complicated your financial history will be. It is important to get a full picture of all of your credit accounts to see if there are any dormant ones that you have forgotten about. There might be an old credit card bill that is slowly draining your score without you even realizing it.
5. Pay Your Bills On Time
This one might seem obvious, but it bears repeating. If you are using credit cards, pay your bills on time, if not immediately. Even making tiny purchases on a credit card and quickly paying it off when you get home will substantially boost your FICO score. Always prioritize paying your bills on time.
More Ways to Boost Your Credit Score
If you want to boost your credit score and stay on the path to financial freedom, there are countless ways to approach it. By following our dedicated Business & Finance guides, you can get insider tips on how to bolster your finances in 2021 and beyond.
