Are you looking to boost your credit score fast before refinancing your mortgage, car loan, or student loans? Securing the best interest rate is crucial, especially with current rates considerably higher than in recent years. To ensure you get the best deal, let’s explore six easy ways to boost your credit score before you refinance.
Top 6 Best Way To Boost Your Credit Score Fast:
- Pay On Time
- Reduce the Amount You Owe
- Increase Your Credit Lines
- Don’t Close Old Accounts
- Don’t Open Any New Accounts
- Understand Your Credit Types
Top 6 Best Way to Boost Your Credit Score Fast in detail:
Pay On Time
Your payment history accounts for a significant portion—35%—of your credit score. While you can’t change your past, you can impact your future by making all your payments on time. Set up autopay for your accounts to avoid missed payments and aim to submit them a few days before the due date to account for varying lender processing times. This is one of the best ways to boost your credit score fast.
Reduce the Amount You Owe
Paying down existing debt is a quick way to boost your credit score. Credit utilization, which makes up about 30% of your FICO score, is the ratio of the credit you’re using to the total credit available. Lowering this ratio by paying down balances can significantly boost your credit score fast.
Increase Your Credit Lines
If paying down balances isn’t an immediate option, consider requesting a credit line increase. This instantly reduces your credit utilization ratio. Remember, don’t open new accounts as this could impact your score negatively. Increasing your credit lines is another way to boost your credit score without much hassle.
Don’t Close Old Accounts
Maintain old accounts, even if you don’t use them regularly. Closing them reduces your available credit, negatively impacting your credit utilization rate. Plus, your credit history, accounting for 15% of your score, benefits from keeping these accounts open. This is an often overlooked but effective way to boost your credit score over time.
Don’t Open Any New Accounts
Avoid opening new credit accounts before refinancing. Each credit inquiry affects your score, with “hard” inquiries staying on your report for up to two years. New credit accounts for about 10% of your FICO score, so wait until after refinancing to apply for that new credit card or financing deal. This patience can be the best way to boost your credit score strategically.
Understand Your Credit Types
Differentiate between revolving credit (e.g., credit cards) and installment loans (e.g., student loans). While both are important for your credit mix, installment loans don’t impact your credit utilization ratio. Be mindful of your credit mix, which makes up around 10% of your credit score. Understanding your credit types is another crucial way to boost your credit score by maintaining a healthy credit mix.
Improving your credit score takes time, but by following these steps and staying informed about the factors affecting your score, you’ll be on your way to boost your credit score before refinancing and securing the best rates. Remember, patience and consistency are key on the journey to a better credit score.
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