Finessing Your FICO: Tips For A Better FICO Score

Aug 1, 2018 11:30:00 AM

There isn’t a sure-fire way to “instantly boost your credit report score (FICO score),” like a lot of flashy advertisements will claim, but we know several hacks that will boost your FICO score the old fashion way: with good financial habits. Listed below is a collection of hacks designated to help you boost your FICO number each month.

Check for errors in your credit card statement

The Federal Trade Commission reported that one in four consumers have identified errors on their credit card statements. You might even have some as you’re reading this! By doing a thorough check each month of your statement, you might be surprised to see the occasional double charge item or even payments marked as late when they were actually on time. It literally pays to double check, especially since five percent of consumers have errors on their credit report bad enough to result in a higher price for a financial product or insurance.

Stay under 30 percent of your credit card limit at all times

According to Bruce McClary, vice president of public relations and external affairs at the National Foundation for Credit Counseling, keeping balances to 30 percent or less of your credit limits is optimal for success. For example, if your credit card limit is 10K, don’t go over 3K.

Ask for a credit limit increase

How will increasing my credit limit improve my FICO score you might ask? It’s simple. When your credit limit goes up, your balance stays the same, instantly lowering your utilization. McClary recommends calling your issuer and asking if you can get a higher limit without a “hard” credit inquiry (hard inquiries can temporarily drop your score by a few points).

Pay your balance and pay it on time!

Payment history has the single biggest influence on credit scores, so it makes complete sense to do your absolute best to stay on top of payments. Even if you can only make the minimum payment, it’s still better than no payment. Delinquent sums stay on your record for seven years (it’s pretty much the FICO equivalent of breaking a mirror). A good hack is to set up payment reminders so you don’t forget. And, if you are going to be late on a payment, it never hurts to call your credit card company to see if you can get an extension – the worst they can say is no.

Open a new credit card (with caution)

Opening more credit cards can often backfire on your FICO score but if you’re responsible and can completely pay them off on time, this will boost your FICO in the long run.

Closing credit card accounts is not always a good idea

You’re better off paying the total balance of your credit card and leaving it open than you are to paying it off and closing it. A closed account will show up on your credit score where as an open one that’s paid off will likely increase your FICO number.

Think of increasing your FICO score like getting into really good shape, it takes time but the effort will pay off tenfold. Additionally, once you have your desired results, it’s easier to maintain then build up.

Tags: Banking Tips, Money Tips, Financial wellness, Financial Education, Credit Cards, Personal Finance