If raising your credit score in 2015 is one of your New Year’s resolutions, we can help. If you are just looking for a tune-up for your credit score, there are many things you can do to get those numbers up. If you have been neglecting your bills and your credit score has suffered, you sadly have fewer options, but there are ways to raise your score. Here are four ways to raise your credit score in 2015 whether it’s in good shape or needs a lot of work:
Pay Off Your Credit Card Debt
One of the easiest ways to fix your credit score in the new year is to pay off any outstanding credit card debt that you have. One of the main factors of your credit score is your credit utilization ratio, which compares your overall credit limit to how much credit you are currently using. So if you have $10,000 in credit limits and have $5,000 in debt, your credit utilization ratio is 50%. Most financial experts say you should keep your ratio below 30%, but the lower it is, the better your credit score, so getting it to zero will definitely help. Need some help getting rid of your credit card debt? Here are some tips to help you out.
Fix Mistakes on Your Credit Report
This is one place that most people overlook. A huge percentage of people have errors on their credit report and don’t even know it. While many of those errors might not affect your score, it is worth getting the errors fixed to make sure your credit report is as clean as possible. Errors can range from reporting errors from your credit lenders to mistakes made by the credit bureaus themselves. Get your free credit reports from the government (annualcreditreport.com) and make sure there are no mistakes. If there are, you can contact the individual credit bureaus (Equifax, Experian and TransUnion) or you can hire a credit repair service to contact the bureaus and get the errors fixed for you.
Get a New Credit Card
This may seem like an odd way to raise your credit score, but increasing your overall credit limit can help raise your credit score. As mentioned above, your credit utilization ratio plays an important part in determining your credit score, so the higher your overall credit limit, the lower your credit utilization ratio, especially if you are carrying debt.
If you are having trouble with your credit score and can’t get approved for a new credit card, try a secured credit card. You have to pay a deposit up front (generally $300, which becomes your credit limit), but you can use it just like a regular credit card and pay your bill on time every month to strengthen your credit history. Just make sure that the secured credit card reports to the three credit bureaus, since some of them do not.
Diversify Your Credit Portfolio
One of the other key factors in determining your credit score is whether you have a diverse lending history or not. If you only have credit cards in your credit report, it can hurt your credit score. In the same vein, if you only have loans or a mortgage in your credit history and no credit cards, that can also hurt your score. Make sure you have at least one credit card and one loan to make sure that your credit history is balanced. This shows the credit bureaus that you know how to handle more than one kind of credit. If you want to get a loan but need to keep your interest rate low, you can try a peer-to-peer lending site like Lending Club