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Do you want to discover how these 6 secret things can boost your credit score? We are spilling the beans on these tips – credit boosting tips that do not require you to get more credit to boost your score. This is a guest post by J.R. Duren.
Credit scores hinge on the big things you do—and the little things. While the little things may not be as glamorous, making them a habit can lead to long-term boosts to your credits scores.
With that in mind, let’s look at three small things you can do to help your scores, plus three bad habits that can hurt them.
Three Small Things That Help Your Credit Scores
The three things we’re going to share here aren’t tips you’ll read on most blogs—we’ve gathered them through our own research and through talking with experts.
1. Watch Out for Chase’s 5/24 Rule. Chase will deny your credit card application if you’ve applied for five credit cards from any bank in the past two years. What most people don’t know is that Chase will count not only the cards you’ve applied for directly, but they’ll also count cards where payments are coming from checking accounts in your name. Chase will do a credit check when you apply, which will drop your score one or two points. If you know ahead of time you won’t qualify for a card based on the 5/24 rule, don’t let your score take a hit by applying.
2. Ask Your Cable Company If They Do Credit Checks. When you start a new account with a cable company, they may ask you for a deposit, but give you the option of opting out of the deposit if your credit scores are good. If you choose the no-deposit option, the cable company will run a credit check, which will cost you one or two points. It’s worth it to pay the deposit and skip the credit check.
3. Lump Pre-Approvals Together. Pre-approvals are necessary to putting an offer on a home. Credit reporting agencies know this, so they’re willing to lump your pre-approval credit checks together and count them as one. However, they’ll only lump together (in most cases) the pre-approval checks you get within a 15- to 45-day window, depending on which scoring models the lenders use. So, make sure you do all your pre-approvals in one round. Stretching them out beyond two weeks could cost you a few extra points.
Three Small Things That Can Hurt Your Score
A lot of what can hurt your credit score is being unaware of certain key information. The good news is that learning that info is pretty easy.
1. Not Knowing Your Statement Closing Date. Most credit card companies report your balances to the credit bureaus on your statement closing date, which is usually less than 30 days ahead of your due date. This is important because, if your balances are higher than 30 percent of your credit limit, your credit scores will take a hit if they already haven’t. If you want to raise your credit scores, know your statement closing date and make a payment before that date.
2. Closing Your Oldest Card. One of the factors that influences your credit score is the age of your credit. The idea behind this is that the longer you’ve had credit, the more reliable you are. Your credit “age” is calculated by averaging out the length of open loans and credit cards. If you make the mistake of closing your oldest credit card, your credit age will go down and your credit score could drop by more than 15 points.
3. Not Watching Your Balances. The biggest influencer of your credit score is what’s called credit utilization. This calculation takes your credit balances and divides them by your credit limits. If that number is higher than 30 percent, your credit scores will drop, and they’ll continue to drop the higher your utilization gets. Most consumers could have higher scores, but they don’t watch their utilization ratio. The easiest way to know your ratio is to divide your balance by your credit limit.
Practice Makes Perfect
Over time, these small principles will help you build up good credit scores. Those good credit scores will help you score better rates on all sorts of things, including mortgages, auto loans, insurance and more.
About the Author
J.R., a reporter for HighYa.com, uncovers the hard truths about personal finance through in-depth research and interviews with experts. He has written extensively on topics including credit cards, credit scores, debt, financial advisors and other personal finance issues.
Additional articles on credit score:
- 5 Ways to Boost Credit Score Without Going Into Debt
- Why having good credit is important…even for the debt-free
- How To Clean Up Your Credit Step #1
- How To Clean Up Your Credit Step #2
- How To Dispute and Error on Your Credit Report
