Ever since I applied for my first credit card, boosting and then maintaining an excellent credit rating has always been a strange priority of mine.
It takes credit to build more credit, but no one wants to offer you the credit you need until you don’t need it, right?
Here are a few tricks that help give your score just enough boost to help you reach new credit goals.
Just doing the below can really help someone who has no other means of getting their credit rating up to the next tier.
Consolidate loans. After four years of student loan debt, I learned an interesting thing about the loan(s). The lender separated what I thought was my 1 student loan debt, into 4 smaller pieces, by year, each their own loan. The credit agencies don’t like seeing multiple loans out to you – that looks like more risk to them. Fortunately, this one is an easy fix. Call you lender and ask to consolidate all of your smaller loans into one loan.
A few warnings:
- This will change your total amount due per month, since you’re essentially refinancing your loans.
- It restarts your repayment period, so my best advice to you is that if you can afford it, keep paying the rate you’re paying now, even if it’s higher than your new minimum is going to be. You don’t want to get stuck with those loans any longer than you need.
Get a close family member or pal to add you as an “authorized user” on their account. The great thing about doing this is that whoever you have doing this for you really doesn’t assume any risk in this situation if they do it right. They can call their credit card company, add you as an authorized user, and just never give you the card that comes in the mail in your name.
What happens here is that you’ll now assume their credit history for whatever card they did this with.
A few things to keep in mind here:
- The longer they’ve had the credit card open, the better it’ll help you with obtaining a credit history.
- You want to be added to a card that does not (and most likely will not) have a high balance. In this situation, you’re trusting that your friend / relative is going to pay their card on time, and not let it creep up too high, or it’s going to affect you negatively too.
- If and when you want to get your name off of the card as an authorized user, your friend will have to be the one to make that call. So make sure you’re working with someone you trust, and have a longstanding relationship with.
After a few months, you should then see a difference in your credit, opening up possibilities for you to now open your own card, get that better interest rate, ect.
The ball is now in your court to continue the trend with your extended good financial behavior.