3 Ways to Boost Your Credit Score in 2018

All the holiday excitement is over and it’s time to face your post-holiday credit card bills. If you stayed within your budget, you shouldn’t have difficulty paying off your bills. However, if you went a little crazy with December cheer, now is the time to take corrective action, prioritize your finances, and boost your credit score.

As you get your finances back in shape, you’re ultimately helping out your credit—and for a multitude of reasons, it’s important to have a good credit score. Good credit grants you better loan approval, lower interest rates, higher spending limits, negotiating power, and more rewards. Your credit score also impacts the ability to obtain necessities like a home, a car, and other lifestyle needs.

So here’s how to start boosting your credit score in 2018.

Pay All Your Bills on Time

If you’re expecting hefty post-holiday bills, the best way to improve your credit score is to simply make timely payments. Making all of your payments on time is crucial to a great credit score and positive credit history. Your payment history has a huge effect on your credit score.

Set calendar reminders or alerts on your phone to make sure you pay your bills and pay them on time. Unpaid bills are a red flag and may indicate to the lender that you’re an unreliable borrower. It’s also important to tackle balances with the highest utilization and interest rates.

Consider a Lifestyle Change

If you find yourself strapped for cash, there are a few things you can do.

Pay at least double the minimum on each payment. If you can, and if there’s no prepayment penalty, doubling down on payments each month will help you tackle the balance quicker.
Rework your budget. Evaluate your budget and cut out unnecessary expenses that are eating up your income. Then you can start allocating that money toward getting out of debt. For example, forgo your daily specialty drink at your local coffee shop and bring a lunch from home instead of buying lunch at work. Setting a strict budget will allow you to free up cash and focus on paying down your debt.
Pick up a side hustle. If you can, apply for a part-time job or do some extra freelance work to build up your funds.
Don’t apply for new cards or loans. For now, stay away from new credit card and loan applications, even if you’re planning to use the extra credit to pay off your debts. Also, avoid using any credit cards you’re currently paying off.

Check Your Credit Report

About once or twice a year, you should check your credit report for mistakes. Maybe you forgot to pay a bill, or maybe you’re a victim of identity theft. If you don’t check your report for these and other problems, chances are you may miss them and they can harm your score tremendously—which in turn would bring you great financial hardship.

According to the Federal Trade Commission, about 5% of consumers have credit errors large enough to increase costs of insurance or some financial products. When you have bad credit with a low credit score, it may take some time to build it back up. Check your history so you can address these problems right away.

When you do check your credit report, make sure you get reports from all three bureaus (Experian, Equifax, and Transunion) to get the clearest picture of your credit, since some creditors only report to one or two. You can check two of your credit scores for free at Credit.com

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