Credit score

This might be the easiest way to boost your credit score this year

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It might not even take you that long.

Key points

  • The higher your credit score, the easier it becomes to borrow when you need it.
  • A quick move could result in a higher score – without much effort.
  • While paying off credit cards is helpful, it can take a while, unlike just checking your credit report.

Your credit score is not just a random number assigned to you. Rather, it is an indication of the degree of risk you represent as a borrower. The higher your credit score, the more likely you are to get approved for a loan or credit card, and the more likely you are to borrow at a more affordable rate.

Imagine applying for a mortgage and having good credit. A lender might reward you with a lower interest rate on that loan than they give someone with fair credit. The result? Reduced monthly mortgage payments for many years.

The highest number your FICO credit score can reach is 850, but for most, a score of 700 or higher is perfectly respectable. But what if your score is not at this level? If so, it’s worth doing what you can to stimulate it. And one easy move could be your ticket to a much higher number – without the hassle of breaking a sweat.

Check your credit report

There are different ways to boost your credit score, but some of them can be tricky and time-consuming. Paying off existing credit card balances, for example, will usually help your score increase. But to do this, you will have to somehow find the money to pay for these cards. This could mean working extra shifts at your job or selling your items to get your hands on more cash.

You can also boost your credit score by establishing a timely payment history with your bills. But again, this can take time. If you’re looking for faster results, there’s one simple thing to do: check your credit report.

Your credit report is a summary of your financial activity as it relates to credit and borrowing. Your credit report, for example, will not show your bank account balances, but it will be list your credit card and loan balances. It will also show how much of your total revolving credit you are using at one time and when you are paying your bills. And, it will give you a summary of your credit mix so you can see how much debt you have on installment loans that are considered the healthy kind to have, like a mortgage, versus less healthy revolving debt, like your credit card balances.

How could checking your credit report improve your score? If you spot a mistake that works against you, you’ll know how to fix it. This could result in a higher score quickly.

So imagine you check your credit report and it lists an outstanding debt that you never incurred. Maybe someone with a similar name is responsible for that debt, but it accidentally landed on your credit report instead.

If you are able to get the lender in question to confirm that you did not take out this loan and that you were not in arrears, you can present this information to the credit bureau that prepared your report. From there, you could have a higher credit score within weeks.

Be vigilant about your credit report

Even if you have a great credit score to start with, it’s still a good idea to check your credit report once every four months or so to make sure it doesn’t contain any errors or red flags. But if your goal is to boost your credit score, ridding your credit report of errors could be your ticket to quick results — and a world of more affordable borrowing options.

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