Hopefully you already know the basics of improving and maintaining a good credit score. Pay your bills on time, don’t max out your credit, and keep an eye on your credit report for inaccuracies. However, beyond these basic perennial good habits, there are some other, more surprising ways you can improve your score. For example, did you know that you might be able to get a higher score just… by asking? It’s true, and we’ll tell you more about it in a minute. Here are four things you should be doing to keep your credit score on the up-and-up.
Group Your Loan Shopping
When you apply for any kind of new credit, it can lower your score for up to a year. That’s because lenders will pull your credit report, known as a hard pull. It leaves a mark on your credit report. Applying for multiple credit products (cards, loans, lines of credit, etc) can compound that problem. The credit bureaus will see it as you needing lots of borrowed cash. In turn, that increases the risk that you won’t be able to handle the new debt load. Statistically, those who have six or more hard credit pulls are eight times as likely to file for bankruptcy as those who have none, according to a study done by FICO.
But there’s a big flaw in the system. When you take out a mortgage, auto loan, or student debt, it’s natural to shop around. In fact, we recommend that you go to multiple lenders to ensure you’re getting the best rate. You are still planning to only get one loan. However, there might be multiple hard credit pulls within a short period of time. That can be bad news for your score.
Luckily, the credit bureaus recognize this situation. The scoring formulas will allow for multiple credit inquiries within a certain “shopping window”. This period of time varies for each credit agency, but it’s typically between 14 to 45 days. During that window, multiple inquiries are treated as a single credit application.
So if you are shopping for new credit of any kind, don’t waste time between inquiries. You also want to limit the overall number of times lenders pull your credit. Don’t let them to pull your credit just to get a quote with current interest rates. They should be able to tell their expected rates without a hard credit pull.
Ask For a Goodwill Deletion
You never know what you can get just by asking nicely. Let’s say you have one or two late payments on your credit record. No one’s perfect, after all. I bet you didn’t know that you may be able to get your lender to delete them off your record just by asking. This is especially true if you are a long-time and otherwise good customer.
Simply call your lender and request what’s known as a goodwill deletion. Make sure you speak to a supervisor, remain polite, and friendly throughout the conversation. It’s also important to go into the phone call with no expectations. They don’t have to do this. They not even be able to help, depending on the exact circumstances. On the other hand, you might catch them at a good time. They may be willing to help you if you’re pleasant and easy to work with.
Don’t Neglect Parking Tickets or Library Fines
We tend to think of municipal fines as something separate from our credit history. However, you could be seriously damaging your credit if you forget to pay a parking or traffic ticket. Or if you still have the library’s copy of War and Peace, despite receiving increasingly desperate communications from the book return enforcement squad. This has become especially important during the pandemic, since we are currently going out less often. So we’re probably holding onto our library books for far longer than normal.
If you end up needing to pay a late fee, just pay what you owe. It would be a mistake to ignore it, dismissing it as “only a library fee.” If these bills go to collection (and they can), your credit score could drop by as much as 100 points. Pay all of your bills on time — even those that are not credit-related. Make sure you hold onto the records of payment too, just in case.
Establish a P.O. Box (If You’re Moving a Lot)
Credit scores are all about stability. That means regularly changing addresses, phone numbers, and employers can potentially keep your score lower than you want. Or lower than it reasonably should be. If you know that you’re going to be moving quite a bit over the next few years, take the time to establish a P.O. box and a stable cell phone number. You can provide these to any potential creditors, as they will never change.
Many people are hesitant to do this, since a P.O. Box is just an extra monthly cost. I get it. But think of the big picture. Having one could potentially save you tens of thousands of dollars down the line. If you need a loan or a credit card, your credit score will be in better condition if you have a stable address on record. That will qualify you for higher amounts and lower interest rates. The post office can even forward your mail from the P.O. Box right to you. Although this shouldn’t really be a regular occurrence, considering the ubiquity of online payments and statements.
The Bottom Line
Some people think their credit score is just something they have no control over. However, that far from being the case. With a little bit of know-how and some care, you can boost your credit score by quite a bit. At the very least, you can make smart decisions to keep your score in tip-top shape.
If you’re interested to learn more about your credit score, here are some other great articles to brush up on. This one gives you more detail about how your score is calculated. This article can explain why your score suffered an unexpected drop. If you have no credit history at all, here’s how you can start establishing a score of your own. Finally, here are some common myths about credit scores and why it’s financially smart to keep your score high.
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