This is a guest post. Josh Wilson, is a Millennial working to achieve a perfect credit score. Josh loves improving his score and maximizing the benefits of great credit. That is why he is writing today about the 3 tips to raise your credit score and avoid scams!
A credit score is a numerical number that represents a person’s credit files, based on their credit-worthiness. The number comes from credit reports that credit bureaus create, based on the information they receive from banks, credit card companies and lenders to determine a person’s potential risk.
While there are several ways to positively raise a credit score, there are just as many scammy services online that claim to help raise credit. In addition to online advertisements, some people also fall for the small, political-like signs on the side of the road that prey on those with poor credit.
Credit Scoring Scams to Avoid
According to Forbes, there are four costly credit score scams that should be avoided. While there are reputable credit repair companies that charge a fee to help individuals dispute or remove inaccurate information on a credit score, there are just as many scammy credit repair companies.
If a credit score company promises to remove negative information from your credit report, even if the information is true, this is a scam. Next, if the company asks for a fee upfront, it’s also a scam, as federal law requires services to be completed before payment is due for credit repair.
Finally, if they promise to create a new credit identity or ask you to sign any blank paperwork, it is likely a scam company. New credit identities means falsifying information and blank paperwork could mean anything, so don’t trust any company who asks you to do anything of these things or makes similar false promises.
Now, let’s discuss three ways to actually raise your credit score…
1. Lowering Your Credit Utilization
Essentially, credit utilization means the ratio of credit card balances to your limits. If your balance is $400 and your credit limit is $1,000, then your credit utilization for that credit card is 40 percent. Obviously, the best way to keep your percentage down would be to pay the credit card, but there are other ways to improve the ratio.
Since a high credit utilization can hurt your credit score, one way to lower your ratio would be to ask for a higher credit limit. This way, you can lower the ratio even when you don’t have the money to pay more money all at once. You could also transfer your balance onto a non-revolving product such as a personal loan, as taking out a loan can improve your credit. However, if you feel like you may then spend more, this could mean simply digging a deeper hole.
2. Checking Your Credit Report for Inaccuracies
As we mentioned in the scam section, there are real credit score companies who can help you dispute false claims, but no one can remove a true negative score. That is, unless, you make things right with the company or lender involved.
Let’s say, for example, you owe an apartment complex $1,000 for a move-out fee or some damages to an apartment. If you’re looking to move into another apartment and they find this claim on your credit score, it’s possible that they could let you pay that former apartment, bring in proof, and allow you to lease the new apartment.
While this will not remove the poor review from your report, it is one way to bypass the problem. That said, if something similar happens but the name on the report isn’t actually you, this could be identity fraud. Under the FCRA, both the credit reporting company and the information provider will need to correct the report.
3. Setting Up Automatic Payments to Avoid Late Fees
While credit card companies do make extra money on late fees and high interest charges, they still want their customers to be able to make automatic payments to make life easier on both sides. To set up an automatic payment with your company, visit the website, app, or call to ask about automatic payment systems.
Generally speaking, most credit card companies will have you automatically pay some small amount, such as $25 a month or so, in order for you to be listed as paid that month. However, there are other options, especially if you have a larger balance or larger purchases. It’s possible to set up full monthly payments on some plans.
Avoiding Scams and Improving Credit
While there are scammy services out there that may offer to remove negative scores, take a fee upfront, change an identifying number, or have you sign blank paperwork, there are also actual companies who can remove negative scores if the information is truly false.
Besides hiring outside help, individuals can lower their credit utilization, check their credit score for inaccuracies, and set up automatic payments to avoid late fees in order to improve their credit scores over time.
Do you have any tips to improve your credit score? I would love to hear them in the comments below!
Carrie & Shannon says
August 10, 2017 at 4:32 pmGreat tips! It’s so important to work on your credit when you’re young but feels so hard to do! I do my best to keep a close eye on my credit card spending and set up automatic payments so I never miss anything!
Carrie & Shannon
YouMeDC.com
Jenna Wood says
August 10, 2017 at 4:38 pmI’ve raised my credit score by 80 points in the past 2 years and it’s definitely been a lot of work. I wrote a lot of letters demanding things be removed from my report- they were either long paid off or fraudulent!
Stacie @ Divine Lifestyle says
August 10, 2017 at 4:55 pmI regularly check my credit with one of the free credit score report websites. I know this doesn’t protect me (I use something else for that) but it does help me see what’s going on with my credit.
Vera Sweeney says
August 10, 2017 at 5:04 pmThese are awesome tips! Your credit score is the key to everything! You have to stay on top of it if you want make sure your finances stay in order.
Mary Songer says
August 10, 2017 at 5:19 pmI like to have a set time every week to pay my bills. I don’t let them pile up. Pay your bills on time.
Jeanette says
August 10, 2017 at 6:38 pmI have been working on my credit for a while and I have been doing everything that you said here. It really helps! I had a few inaccuracies on my record and so I changed those and my numbers went up fast.
Cassie says
August 10, 2017 at 6:39 pmWe have a slightly different credit system here in Australia but the sentiments are still the same. I used to work in credit collection for a huge telecommunications company and we regularly spoke with customers who were denied bank loans all because of a $400 phone bill they never paid and were black listed (our system here in australia doesn’t contain a score but rather you either have good credit or you dont, and are therefore blacklisted!).
Brenda Kight says
August 10, 2017 at 6:59 pmThis information is something everyone should take the time to know. There are so many scammers out there it is scary!
Karen Morse says
August 10, 2017 at 8:21 pmI hate having to deal with a poor credit score so I make sure to keep all my finances in check, especially my expenses when using our credit cards. These are great tips!
Michelle Gwynn Jones says
August 10, 2017 at 8:58 pmI really need to pay better attention to my credit rating. Sometimes I check it and its gone down (not much) and I can’t figure out why. Maybe if I check it more often I would catch it happening
Sadie says
August 10, 2017 at 8:59 pmThese are great tips! I don’t do automatic payments but lowering utilization and disputing items on my report have helped a lot
AnnMarie John says
August 10, 2017 at 9:05 pmI take very good care of my credit score. I don’t like owing money and spending more than I can afford. I think these are awesome ways to raise your credit score!
Ali || Veggies by Candlelight says
August 10, 2017 at 9:12 pmWe do automatic payments for all of our credit cards, so at least the minimum payment is made and usually, we make more if it’s got a revolving payment.
GiGi Eats says
August 10, 2017 at 9:28 pmI am 30 years old and I just got a credit card and I am just now realizing what credit is all about! HA! #latebloomer
krystal says
August 10, 2017 at 9:45 pmI am working on improving mine. I will use some of your tips to help!
Nancy Johnson Horn says
August 10, 2017 at 9:52 pmWe have good credit and we’ve worked very hard to maintain our good rating but I had no clue about the first two tips.
liz Cleland says
August 10, 2017 at 9:55 pmI needed these because my credit hit a rough spot during my younger years. I think this will help tie up loose ends and get it back to a better score.
Shauna says
August 10, 2017 at 10:08 pmThese are great ways to help improve your credit score. People just have to remember it does take time regardless of the route you take and shouldn’t expect miracles, that’s how they get scammed.
Victoria says
August 10, 2017 at 10:22 pmThese are some fantastic tips and very important kek points on keeping your credit in check! Thanks for sharing!
Pam says
August 10, 2017 at 10:23 pmHaving a good credit score is so important. These are great tips for improving your credit score.
Connie says
August 10, 2017 at 10:24 pmThese tips are great. It’s important to keep that credit score looking good.
Kathy says
August 10, 2017 at 10:39 pmThese are all great tips. I just got my first credit card last year. I honestly don’t use it very much at all. Just every few months for something small.
Sarah L says
August 10, 2017 at 10:49 pmI have one credit card that I hardly ever use. When I do use it I pay it off in full.
Claudia Krusch says
August 10, 2017 at 10:55 pmIt is so important to keep track of your credit score. These are great tips for raising it. I will have to share this post with my Son who is just entering college this year.
Reesa says
August 10, 2017 at 11:00 pmThis is really great info. So many ppl have no idea how to do this.
Heather Johnson says
August 10, 2017 at 11:20 pmAll the scams out there really tick me off! We are working on getting rid of our debt to raise our credit score a bit.
Shelley R Zurek says
August 10, 2017 at 11:39 pmI love the avoiding late fees tip. I don’t think it can be emphasized enough that paying the balance down and keeping it at 0 is the very best approach.
Sarah says
August 11, 2017 at 12:24 amGreat tips! Always good to avoid late fee’s. It’s hard to raise your credit score but I love the tips you have and show that it’s possible.
Melanie says
August 11, 2017 at 2:27 amI need to set up the automatic payments. That’s a great idea! I try to stay on top of my finances, but things happen.
Lana simanovicki says
August 11, 2017 at 2:40 amThis is amazing info for me .I don’t know what kind of credit I have
Toni | Boulder Locavore says
August 11, 2017 at 3:57 amGreat tips! Very helpful for people who are careful with their credit score. Thanks!
Sherry says
August 11, 2017 at 4:53 amI haven’t checked my credit score in a while. These are great tips that I will have to try.
Amy Desrosiers says
August 11, 2017 at 6:25 amMy husband and I just bought our second home thanks to our high credit scores. We practiced a lot of these tips to build our credit and keep it that way.
Margaret S Porter says
August 11, 2017 at 6:49 amIm working on raising my credit score. Its hard work but will be worth it. Sadly I made mistakes when I was younger
mycraftingworld says
August 11, 2017 at 6:51 amThis is such good information. I wish the younger generation would learn to use cash. When the cash runs out… that is it. No more spending. That way their debt can’t grow. Thank you for giving them such good advise.
Tina says
August 11, 2017 at 7:27 amThese are great tips. I think so many people fear using credit cards with the thought they will hurt their credit score. Thanks for the tips on how to use them properly.
Jessica Joachim says
August 11, 2017 at 7:50 amI think keeping track and checking often is super important. If you don’t keep track of it, you never know if someone has your number and is using fraudulently.
Ayana Pitterson says
August 11, 2017 at 8:56 amI am glad you spoke about the scams. It’s really annoying that people would prey on the very people who are in trouble due to finances. These are some awesome and wise tips.
Shoshana Sue says
August 11, 2017 at 11:23 amIt is a pity that many people do not heed to such warning as removing negative information or making an upfront payment. People are so desperate to improve their credit score these days and ignore the obvious red flags.
Jennifer G says
August 11, 2017 at 2:21 pmHaving good credit is really important for the future. This is wonderful information to teach those that need to learn more about how to ensure their credit scores are great.
Mary Songer says
August 11, 2017 at 9:31 pmIt’s great to see a millenial taking care of their credit right from the start! All our kids should be taught about credit and how to use it. Good post!
Cindy Ingalls says
August 11, 2017 at 10:47 pmAfter having so many cards for so many years I closed many of them. It did lower my score for a bit, but now I feel more in control of my spending. Less cards is so much easier to manage.
Kristina says
August 12, 2017 at 9:36 amThese are great tips! Especially automatic payments. I have that for my car and utilities. I think a lot of people are just unable to utilize this method because they may be short on funds to pay the bill when due.
Dana Rodriguez says
August 12, 2017 at 6:15 pmThis is a great post. It is so important to have a good credit score. I always kept away from the cards that asked for a deposit or had crazy interest rates.
Rachel Catherine says
August 12, 2017 at 8:44 pmMaking automated payments really helps. You just have to make sure you have it set for the right amount of months so you don’t over pay or under pay.
Ron Leyba says
August 14, 2017 at 10:52 pmGreat tips you got here. For sure many will find this very helpful. Love it!
Cynthia Schmied says
August 18, 2017 at 12:49 pmvery good advice that I could have used about 30 years ago. We are now working on getting out of debt but it has not been an easy process.
Holly Wass says
August 20, 2017 at 9:44 pmStaying out of debt is a daily decision, sometimes we win
Sarah L says
August 26, 2017 at 10:21 pmMy mortgage is paid off. I buy only when necessary. I use thrift stores when I need something.
Mary Songer says
September 2, 2017 at 6:55 pmthis post is a good reminder to check your credit report on a regular basis. I’ve bee guilty of not checking mine. You don’t want to apply for credit sometime and be surprised at your number. Plus knowing your number means you can’t be fooled into thinking you have bad credit and have to pay a higher interest rate.
Mary Songer says
September 5, 2017 at 8:01 pmMake sure you pay your bills on time. The tip to set up automatic payments is a great one. I do that with my credit.
Rosie says
September 19, 2017 at 10:37 amI know seniors’ credit scores can be lower for lack of having any loans, etc. that you are demonstrating an ability to be paying on time. Don’t close cards that you don’t use, it can lower your score.
Patricia Green says
October 29, 2017 at 9:20 pmI worked as a Loan Rep for some time. Let me say that these are great tips! #3 is so easy to do too!
mycraftingworld says
March 12, 2018 at 7:28 amCredit is so important and tricky. You don’t want too much or too little. The best thing is to pay your bills in full, if possible, and pay on time. Don’t live beyond your means.