RESOLVE: Improve Your Credit Score

Have a big purchase like a car or mortgage coming up in 2018? Make sure your credit score is in check before that happens! Finance-focused resolutions are super popular and this one definitely ranks high because it is very important for lots of other life goals. What might seem daunting at first, is definitely manageable when you break improving your credit score into a few easy-to-follow steps. We’ve been doing these for a few years now and have for sure reaped some benefits because of the constant diligence! Let your calendar reminders become your best friend, and start tracking that number…

Be sure to check out all our other resolution suggestions here!

5 steps to improve your credit score:

  1. Pay down your balance. This once sounds obvious, but a large part of your score is determined by your utilization percentage. This means that the lower your owed debt, the lower your percentage!
  2. Ask for credit increase every 6 months. This will also help your utilization percentage plummet. The higher your total credit limit (across all cards and lines of credit), the more your percentage gets eased. For instance, if you had $1,000 limit and $200 in debt, your utilization is 20%. But if you ask for an increase and your limit jumps to $2,000, your utilization is now only 10%! Set those calendar reminders to check in with your banks!
  3. Keep your cards open to build history in your credit report. It is really important to show longevity with your cards, so never cancel your oldest card and try to keep as many open for as long as you can to help your overall average. Pro tip: if you want to get rid of a card because of the annual fee, call and ask for them to “downgrade” the card for you to a version that does not have an annual fee. Even if you don’t think the card has a lower fee otpion, it’s worth the call. They normally don’t advertise this! Though you’ll lose some of the perks that come with the card, you can still hold onto the longevity with that company. Just be sure to still put a small purchase on the card once a month and pay it off right away.
  4. Check your score often! It is important to watch your credit score and make sure you are on track for improving. Even if your score is high, it is really good to know where you stand and watch out for changes in your credit report. We both love using Nerd Wallet to monitor our scores. It’s free and they have great simulators that show how your score will change if you add another credit card or pay off debt.
  5. Monitor your spending consistently! We love Personal Capital as a great tool to see all of your accounts at once in one place. It is important to have a handle on exactly what you’re spending, and that is impossible to know unless you are monitoring all of your transactions constantly.

Our favorite credit cards:

  • For Travel: Chase Sapphire Reserve
    • This card has a high annual fee, but it is worth it! You get the Global Entry Fee waived and a free subscription to Priority Pass which let’s you access airport lounges accross the globe. The high annual fee ($450) is balanced out by a $300 travel credit and great intro offer of 50,000 bonus points (worth about $750 for booking travel through the Chase Ultimate Rewards Site).
  • For Shopping Perks: Citi Cards
    • We love to use the Citi Price Rewind feature to get price guarantees on all of our shopping. You can read our post on Saving Money Online Shopping for all the details. We also love that this card does not have an annual fee.
  • If you’re addicted to Prime: Amazon Prime Rewards Visa
    • If you have found yourself Prime-ing things to your home for a last minute gift, office to make sure you get a dress in time for an event, or hotel room while traveling because you forgot a phone charger (ugh, been there.), this is the card for you. With 5% back on any Amazon purchase and an immediate $70 Amazon gift card, it definitely rewards you quickly!

Do you have any tried-and-true credit score hacks? Have a card you’ve lived with and loved for years on end?? Let us know in the comments!

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4 comments

  1. guys–creditkarma.com is excellent source of information, including providing unlimited free access to one’s transunion and equifax scores….it gives you free access to all open and closed credit cards in your name, current balances, current utilization ratio, whether there are any derogatory marks associated with any of your accounts (this is critical to monitor and correct any items which wrongfully appear) and other stuff as well….highly recommended……jonny

    Liked by 1 person

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