Credit scores are essential to ensuring your finances are healthy, but getting your credit score and tracking it has always been problematic. I’ve shared previously that Discover allows cardmembers to access their FICO® Credit Score for free, but Discover is now doing something no other card company has done-they’re offering everyone (yes EVERYONE) their FICO® Credit Score for free.
Discover allows you to access to your FICO® Credit Score for free with the launch of its new Credit Scorecard. With Credit Scorecard you can get your personalized credit profile and your FICO® Credit Score that is used by 90% of the top lenders. You’ll also get a detailed breakdown of the score to help you understand your score and in turn that will help how to improve it. In that vein, I put together seven tips to help you improve your credit score.
7 tips to help you improve your credit score
1. Pay off your balances.
I know-duh. But, it’s the best way to try to improve your score. When we recently paid off the last of our credit card debt our scores improved more than 80 points putting us in an entirely different lending bracket.
2. Keep your spending under 30% of your limit on each card.
Most people don’t realize that you need to utilize less than 30% of your credit limit on each card. That means if you have a $1,000 limit you should only be charging $300 on that each month EVEN IF you pay off the balances each month.
3. Keep your inquiries to a minimum.
Your credit inquiries can really have an impact on your score. If you need to apply for a new card or a loan, check your recent inquiries to see when your most recent one(s) were before you apply. This includes credit checks for things like getting your credit score (yes, some companies do a hard inquiry), applying for new cards, or requesting a balance increase.
4. Update your salary information on your existing accounts.
When you get a raise, start earning from a side gig, or add a second income, you should update your salary information. This can lead to higher credit limits that can be a great way to keep your balances under 30%.
5. Keep that old card active.
Instead of closing old credit card accounts-keep them active. I do this rather simply by having one monthly bill on autopay using the credit card. I also automatically pay the card off every month. Use monthly bills like the Netflix subscription you pay each month, your cell phone bill, or your utility bills.
6. Pay your bills on time.
Also a no-brainer, but sometimes life gets in the way. For accounts that carry small balances each month, have them auto pay from your bank account. For those larger balances or balances you’re trying to pay off, make sure you set an alarm in your phone to remind you to pay your bills, and keep a physical or digital record to ensure you paid off everything this month. (You can use my free bill tracker to do this.)
7. Dispute issues and ask for forgiveness.
Mistakes happen to us and by us all of the time. Take the time to dispute any issues you find on your credit report. Whether it’s an account that was paid on time marked late or an account that is not yours-take the time to write a letter providing all the information necessary for credit reporting agencies to take care of the mistake. And if you make a mistake by paying a bill late call the company ASAP. They may be able to forgive it before it becomes a mark on your credit report.
Why focus on your credit score?
A new survey from Discover found that:
• 61% of people who checked their credit score in the last year said that doing so helped improve their credit behavior. This includes things like paying bills on time, paying down loans, and maintaining low credit card balances.
• 60% of those that checked it within the last year saw their score improve.
Try out Credit Scorecard and then use my tips to help improve your credit score.
A note about Discover:
Credit Scorecard is the latest example of Discover’s commitment to educating consumers about financial health. In 2013, Discover became the first issuer to offer FICO® Credit Scores to cardmembers on their monthly statements and online. And last summer, Discover introduced a feature that enables cardmembers to track their recent FICO® Credit Scores.
Disclosure: This is a sponsored post on behalf of Discover. All opinions are my own.