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If you need help with bad credit, the good news is that you can boost your credit score much faster with credit card boosters.

Whether buying a new car or planning a trip somewhere, a good credit score is often needed to make this happen.

So how do you improve your credit score before applying for a loan?

And how can you make credit card boosters work for you?

Let’s dive in.

What Are Credit Scores?

Unless you sit down with a loan officer or a credit card issuer, you’ll likely vaguely understand what your credit score means.

A credit score is a number that determines your creditworthiness between the values of 300-850 points. If you get a higher score, you have a better profile as a borrower to the lenders. 

Your credit history is a portfolio of your existing open accounts, repayment history with the existing debts, and other financial obligations logged into your point system. 

The Purpose of a Credit Score

Credit scores are given points on a report card for managing finances. You’re a healthy borrower to lenders when you have a high score.

Alternatively, if you have a low score, lenders can predict if you are a subprime borrower or part of the percentage that will be delinquent in the future.

Credit scores are data used by banks and creditors to approve or withhold credit or loans.

The result of your credit score is the basis for the terms of the loan agreement, the down payment percentage, and the interest rate for a period.

Credit Inquiries

Banks or Credit Issuers do not investigate or check your credit score unless it is requested. It is neither part of your credit report nor logged into your credit history.

But they will pull up your credit score and assess how to handle your account in case of a hard inquiry.

Your payment habits are closely monitored and ranked according to points; it’s the reason your history can change. Banks look at how often you made late payments in the past.

They examine how much and how long your existing debts are. Banks also investigate if you have other financial obligations.

Those without a credit card who pay directly through a checking account will have a lower score than those who use a card. The payment history is recorded on the card payments.

Credit Score Range

Lenders or Creditors use VantageScore developed by the three major credit bureaus. Some will classify the credit score of 661 as good, while FICO (Fair Isaac Corporation) score is 670. 

To be safe, set your credit score to no less than 661 and use credit card boosters to push it up. 

If you score 300-579, you better work on applying credit card boosters to pull you into 580-669 and have a fair score. 

A score below 661- 670 labeled as a subprime applicant will have to pay their mortgages at a higher interest than the conventional mortgage rate.  

With a score above 700, you are a healthy borrower and enjoy the perks of lower interest rates, longer payment terms, and faster approvals for loans or credit requests. 

How to Make Credit Card Boosters Work for You

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Credit card boosters will help you get a higher credit score if you maintain healthy and sound financial habits. 

A credit booster allows you to add additional data to your credit history and boost your FICO scores. The scores give the lender an idea of the borrower under the criteria:

  • On-Time Payment History- 35%
  • Credit Utilization or Debts Owed- 30%
  • Length of Credit History- 15%
  • Credit Mix- 10%
  • New Credit- 10%  

Your payment history weighs heavily in determining your FICO score. The credit bureau accepts the records of your monthly payments on car amortization, student loans, and mortgages. 

If there is no history to refer to, you get a low score or are considered a thin-file individual.

A credit booster helps increase the credit score of those with no credit history. Your bank payments for your monthly rent, cell phones, tuition, and utility bills paid on time are all recorded. 

This valid data predict the likelihood that someone will pay a debt.

Credit Card Booster Benefits for Your Credit Score

Credit card boosters can benefit you if your goal is to raise your credit score. The difference in achieving this lies in your commitment to earning those points. 

Even if you start from the lowest score, you can always get a credit boost and stick to a disciplined spending plan.

A credit booster will be no help to those with an extended history of not paying on time. 

It’s best to get on the program and pay attention to your balances and due dates because the credit booster records only positive credit history. Using the credit booster will be helpful if you fall into one of the following categories:

  • Have no credit history  
  • Poor credit history but started recent reliable payments of financial obligations.  
  • Credit score ranges from 550 to 625

Don’t Punish Yourself if Your Credit Score Is This Low

You may have missed out on paying your credit card and loans on time or exceeded your credit utilization ratio. Correct the issue and give yourself time to keep working your way to push up your FICO score.

A person with a credit score below 600 or a sub-par client will face higher interest rates when applying for a personal loan to pay off the credit cards.

You’ll save more with a bank loan than paying the interest charges of your credit card. In the long run, your actions will save you from throwing away hard-earned money.

Even with the effort of an aggressive debt-payment plan, you must give yourself time.

So keep trying to lower your credit utilization ratio and maintain your on-time payments for good credit standing.

Build Your Credit Score the Right Way

I’ve listed some practical ways to build your credit. Open your mind to the following suggestions and see the positive effect on your credit utilization ratio.

1. Set Realistic Expectations to Improve Credit

There is no instant formula for building your credit score; like any stable foundation, this takes time.

Setting realistic expectations for your goal gives a clear vision to achieve higher credit scores. But accept that this takes time and discipline to get to the credit score you want.

2. Lifestyle Changes for a Better Financial Goal

Carefully allocate your monthly income to allow payments on time. It may entail tightening your spending so you can make monthly payments.

This action will lower your credit card balance and save you from paying high interest.

3. Know when your Credit Card Company Reports your Balance to a Credit Bureau

The credit card issuers report your balance on the closing date or the last day of the billing cycle.

Be careful to distinguish this from the statement due date in your bill. Knowing this schedule allows you to make payments before the closing date and reflect a low or zero balance for the month.

4. Pay down Debt and Pay Twice a Month to Keep Balances Low

Paying down your debt twice a month keeps balances low on a credit card. If you made an expensive purchase, it’s best to pay two weeks before closing and another payment before close.

5. Pay Bills on time and Get Credit for Utility and Cell Phone Subscription

Paying your loans, credit cards, and other financial contracts on time shows your commitment to delivering your obligations. The same rule applies to utility and cell phone payments through your bank account. Experian Boost will record these payments and add them to your credit score.

6. Dispute Credit Errors on Credit Report

Check your credit reports with TransUnion, Equifax, and Experian for incorrect reporting or discrepancies. Then request a correction to avoid pulling your score down. Late payments, listed accounts, or inaccurate findings must be flagged and disputed.

7. Raise Credit Limits Carefully

Don’t request a raise in your credit to accumulate more debt.

Instead, use this to drop your credit utilization if you’re paying a large debt.

You can request a credit line increase every 6-12 months to help your credit utilization ratio.

Will a Credit Limit Increase Hurt Your Credit Score?

Before you request an increase in your credit card limit, you must remember the different scenarios that can play out.

The lender will dig deep into your credit history and either approve it based on your excellent standing or reject it because you are a risk applicant who may or may not settle a debt.

The issuer may conduct a hard credit inquiry that temporarily pulls down points from your credit score.

But if your income has increased with a positive credit history, you hit two birds with one stone. You get approval, and you push up your credit utilization ratio.

In the same way, if your hard credit inquiry shows negative findings on late payments and high credit card balances, your credit score is pulled down.

Credit card balances are added and divided by the overall total limit. The value directly affects your credit utilization ratio.

How to Sign Up for a Secured Credit Card

A secured credit card is backed up by a cash deposit wherein you pay upfront, and the credit limit is the same as your credit limit.

You use this as a regular credit card with your on-time payments reported to the three credit bureaus.

You can apply online and fund your checking or savings account. Another way is to mail a cashier’s check or money order to the Credit Card issuer of your choice.

Your approval will come as your secured credit card.

Apps to Help Boost Your Credit Score

There are many apps and financial instruments to help boost your credit score. You should study each and see what is helpful to increase your credit score.

Experian Boost

Experian Boost is a free service reporting Bureau that allows you to add data to your credit history to improve your FICO score.

Since your on-time payment history is the item that lenders or banks look into, this is where Experian will record your three months of payments within a six-month window for the Experian Boost to work.

The boost allows you to add additional on-time payments to your credit report by linking your checking account. The one used to pay for your utility providers, telecoms, and media video streaming.

You will choose what items have positive payment histories and added as data in the Experian credit report. This additional information increases your FICO 8 credit score.

TransUnion

TransUnion caters to businesses and the public sector with a monthly credit monitoring fee.  

You can access the online credit score simulator, which helps you see how future events and actions like closing a credit card or applying for a new loan will affect your credit score. 

Another feature is the CreditCompass which gives customized recommendations to get your credit score in shape. Last, it has TrueIdentity for identity theft insurance. 

You get your credit reports, credit scores, and identity protection of products to the consumer. 

Aside from getting email reports, instant alerts will notify you if someone uses your name for a credit application. 

Credit Karma

Credit Karma has the credit Score Simulator that gives you an estimated outcome based on your latest TransUnion credit report.

This feature helps you dig into possibilities of what you can do but does not guarantee future credit score changes. 

Your score from VantageScore 3.0 shows your credit health. The working simulator predicts how an estimated action will affect your score. 

Ultimately, this will help you decide whether to invest or prioritize payments.

myFICO

myFICO allows you to make sense of your FICO scores. It compares your data from the three credit bureaus and makes you understand the score differences. 

By monitoring your credit score, you can simulate credit events that will add to or hurt your FICO score.   

It helps you monitor your files and informs you of any inquiries, new accounts, changes in the address, or late payments. 

In addition, it’s like a personal tracker, so you do not miss out on your financial moves.

Personal Capital

Personal Capital is ideal for investors that need advice for investment planning, linking existing accounts, tracking spending, portfolio performance, retirement progress, and fees. 

You can use its free tools such as the investment checkup, 401 (k) fee analyzer, and spending tracker. 

You can even link your bank, brokerage, and credit card accounts. You’ll get an analysis of your asset allocation and inform you what you need to increase or decrease in your holdings of assets.

You Now Know How to Improve Your Credit Score

Improving your credit score is hard work!

The good news is that you now have a few tactics up your sleeve that’ll help skyrocket your credit score to the top.

If you pay for your living necessities and utilities on time, you could use this data to prove your reliability. Let the data work for your benefit and earn credit points for consistent payment history.

A good credit score will allow you better opportunities to improve your financial future. I’m confident you’ll make it happen.

Author

Chris is the founder of FWO, the blog for people looking to reach financial independence and stay inspired along the way.

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