Sure, credit-scoring models are complicated (all that algorithm-ing and such). But, when you get right down to it, the secret sauce to building good credit is actually pretty straightforward: Take a whole bunch of on-time loan payments, keep a pinch of debt, stir in some new accounts, and let the thing bake. Seriously — building and rebuilding credit takes some time.
Still, there are a few seriously simple ways to hack your credit. And while they’re no substitute for the good old traditional recipe, these maneuvers could give a so-so credit score a quick boost. (Not sure if you need one? You can see where you stand by viewing two of your free credit scores, updated every 14 days, on Credit.com.)
Here are a few ways to hack your credit score.
1. Pay Off Big Credit Card Balances
Because if you’ve got ’em, there’s a good chance they’re messing with your credit utilization ratio. That’s how much debt you’re carrying versus your total credit. It’s recommended you keep that ratio below at least 30%, and ideally 10%, of your limits. So paying off purchases putting you over that threshold — in total and on individual cards — can help.
2. Ask for a Credit Limit Increase
If you can’t address those balances right away or you’re saddled with a seriously low credit limit, you can ask your issuer to up your limit. Some notes before you do: They’ll likely pull your credit to see if you can handle the increase. If your credit is bad, you might be met with a resounding “no.” Whether approved or denied, that credit pull will leave a hard inquiry, which will cost your score a few points. That ding is worthwhile if you get what you’re asking for but less so if you don’t. You can find more on asking for a higher credit limit here.
3. Become an Authorized User
Consider this a credit card with training wheels. Authorized users, who are added to an existing credit cardholder’s account, get credit for using that card, even though they’re not responsible for making payments. In other words: You can capitalize on a loved one’s good credit and, if things take a turn for the worse, you can ask to be removed from the account and have it scrubbed from your credit report.
4. Look for Errors
The hack here, sadly, is that you might have a mistake needlessly bringing down your score. According to the Federal Trade Commission, one in five people do. If you’re among them, be sure to dispute the misinformation with the credit bureau in question (here’s how). Your credit score will likely thank you for it. (FYI: You can do a complete credit check by pulling your free annual credit report from each of the major consumer credit reporting agencies at AnnualCreditReport.com.)
5. Open a New Account
OK, bear with us here for a second, because we’re not suggesting you take on financing you can’t afford. That’s a terrible idea. We are trying to draw attention to a very important nuance of credit scores: They reward you for responsibly managing different types of credit. So, if all you’ve got is a student loan, getting a credit card could ultimately improve your score. And if all you’ve got is a credit card, taking out an installment loan, like an auto loan or mortgage, could do the same — though in that scenario, you’d definitely be upping your debt load, so it’s best to only add that financing as you actually need (and can afford) it.
6. Group Your Credit Applications
Most credit scoring models group credit inquiries for like financing as one hit to allow you to comparison shop. (It’s technically called de-duplication.) So, if it is time to add a mortgage or auto loan, make sure you keep all applications within a 30- to 45-day window. Credit cards are a different story — each one of those can generally be held against you, though VantageScore does group all inquiries made in a 14-day window.
7. Keep Old Credit Cards Open
It can be tempting to formally close those old credit cards that got you into trouble in the first place. But don’t make that call quite so fast. Closing a credit card can hurt your credit utilization rate and, you guessed it, your credit score. Leaving that card open, on the other hand, could help your score out, especially if you’ve sworn off using its limit. There may be times when closing a credit card is, in fact, the right call, but carefully consider your options (can you simply put the thing on ice?) before officially cutting ties.