3 Credit Card Tricks That Could Boost Your Credit Score

Planning on applying for a loan or other line of credit in the near future? If so you’ll want your credit score to be as high as possible to not only improve your chances for approval but also secure you a better rate. While credit scores can’t be upgraded overnight, there are a few moves you can make to give it a small boost before having your credit pulled.

According to The Washington Post, it’s possible to raise your credit score by as much as 20 points over the course of two to three months just by changing some of the ways you use your credit cards. While some of these tips may seem odd or counter intuitive, they all take advantage of the way FICO credit scores are calculated.

With that in mind the first step is to ensure you are paying your bills on time. At 35% payment history makes up the largest chunk of your score so the subsequent tips won’t help much if you aren’t making consistent on-time payments to begin with.

The next largest factor in your score is your amount of available credit. It’s recommended that you use no more than 30% of your credit limit at any given time. Here’s where it gets tricky: this is true for each of your cards as well. To achieve this you may look into transferring some of the balance from a card with a low limit to one with a higher limit. Doing so will help you to hit that target of under 30% across the board.

Another interesting note about the 30% rule is that you might have to make payments more frequently than once a month in order to maintain it. For example, say you have a card with a $5,000 limit that you put $2,500 on each month. Even if you pay off the balance in full each time it’s due, creditors will still see that you’re using 50% of your limit on that card. Paying attention to when your cycle date ends and ensuring that your balance is low by that date can help you avoid this issue.

If you have multiple cards chances are you have a couple that you rarely use anymore. While the logical thing to do would be the cancel them, the loss of that available credit could actually ding your score in the short run. Instead it might be a good idea to make a few purchases on those cards to maintain a strong payment history on them.

Juggling credit cards certainly doesn’t sound like a financially sound technique. In fact it might seem like the last thing you would want to do while trying to polish your credit score for a loan application. However, understanding the nuances of how your score is calculated and making small adjustments in how you use your credit cards could actually improve your FICO score and help you get the best rate possible.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Uber Relaunches UberPool as UberX Share

With demand for travel continuing to rise, the ridesharing app Uber has announced a feature to help both travelers and commuters to get to their destinations while saving money. After previously pausing its UberPool service option during the pandemic, Uber is now rolling out a replacement called UberX Share. At this time, the new option is available to riders in New York City, Los Angeles, Chicago, San Francisco, Phoenix, San...

Split Payment Platform Kasheesh Launches as Alternative to BNPL

In recent months, "buy now, pay later" (BNPL) platforms have exploded in popularity. What's more, with Apple jumping into the space, the practice is likely to continue growing despite some concerns in regards to how BNPL services impact consumers' personal finances. With that in mind, one FinTech has just revealed its alternative: a payment-splitting platform for online retail. Today, Kasheesh exited stealth mode to announce the launch of its unique...

Credit Karma Money Spend Adds Cashback Offers for Cardholders

Those looking to add some extra cash back into their pocket will soon have a new option. This week, the popular credit monitoring site Credit Karma announced a new feature for its Credit Karma Money customers. Now, debit cardholders will be able to earn cashback when making purchases from select retailers. According to the site, the list of eligible retailers includes national chains, such as Adidas and Shake Shack, as...