You have likely heard of the term “Credit Score” at some point in your life. Think of it as a financial report card that money lenders use to see your ability to pay back borrowed money on time. These numbers generally range from 300 to 850 and hold significant power in your financial life.
Whether you’re dreaming of owning a home, buying a car, or simply getting a low-interest credit card, a strong credit score can make all the difference. It’s not just about getting approved—it’s about getting approved on favorable terms. A strong credit score can save you thousands of dollars over time and it can open doors to more and better financial opportunities.
In this blog, we’re stepping beyond the traditional tips and sharing 10 innovative life hacks that can give your credit score a boost faster and help set you up for financial success.
Be an Active Utility Bill Payer
Some utility companies now report your payment history to credit bureaus. Paying your utility bills on time can show your responsible financial behavior and contribute to an improved credit score.
Avoid Opening Too Many New Accounts
While having a mix of credit types can be beneficial, opening several new credit accounts in a short period can raise red flags for lenders. Each time you apply for credit, a hard inquiry is made on your credit report, which can temporarily lower your score. Be selective about new credit applications and only apply for credit when necessary.
Use Excess Earnings from Side Hustles
Channeling extra funds earned from any side hustle you have toward paying down debt can lower your credit utilization rate and show responsible financial management. They can contribute to credit score improvement.
Embrace Rent Reporting Services
Your on-time rent payments are now recognized in your credit score. Rent reporting services can link up with your landlord to report your rent history to credit bureaus, potentially giving your score a lift through consistent, positive payments.
Explore Credit Builder Loans
Credit builder loans are specifically designed to help you establish or improve your credit. These loans allow you to make regular payments, which are held in an account. Once you’ve completed the loan term, the funds are released to you, and your improved payment history is reported to credit bureaus.
Join Experiential Credit Programs
Certain financial institutions offer programs that consider your financial behavior beyond just credit reports. By participating in these programs, you can demonstrate responsible money management habits, which might lead to credit score enhancement.
Opt for Peer-to-Peer Lending Platforms
Peer-to-peer lending platforms connect borrowers with individual lenders. Successfully managing loans through these platforms can demonstrate your creditworthiness, enhancing your credit profile.
Utilize Secured Credit Cards
If you’re trying to rebuild credit, secured credit cards are a smart option. You’ll make a deposit as collateral, which determines your credit limit. Responsible usage and timely payments can help elevate your credit score.
Become an Authorized User
If you have a close friend or family member with a strong credit history, becoming an authorized user on their credit card can help boost your credit score. Their positive payment history and responsible credit usage can be added to your credit report, potentially giving your score a healthy nudge.
Monitor Your Credit Regularly
Staying informed about your credit profile is crucial. Sign up for free credit monitoring services to receive alerts about changes to your credit report, allowing you to address any issues promptly.
Your credit score is a powerful tool that can propel you toward financial opportunities. By implementing these life hacks on a daily basis, you can improve your credit score. Improving your credit score takes consistent effort, so be patient and stay committed. Your efforts today will pay off in the future with lower interest rates, better loan terms, and increased financial freedom.
*The information provided in this blogpost is for general information purposes only and should not be viewed as financial or other professional advice. If you are seeking financial or other professional advice, please consult a financial planner or other appropriate professional.