I am planning on applying for a new credit card soon and am hoping to raise my credit score as much as possible before applying. What are some ways I can look good to issuers to increase my chances of approval?
That’s an excellent question. Here are some of the best ways to increase your credit score:
- Pay your bills on time: Payment history is the biggest component in determining credit score. As long as you stay on top of your payments, your credit score will rise.
- Lower your credit utilization rate: To raise your credit score, you must keep your credit card balances low. The credit utilization rate measures the amount of your credit limit that is being used and accounts for 30% of your credit score, making it the second largest component of your credit score. Most experts recommend that you use 10-30% of the limit on any credit card, to help build up your credit score. and much lower is much better.
- Look to transfer or refinance existing debts: Being unable to pay off debts due to high-interest payments, can have large negative impacts on your credit score. However, by refinancing your loans you can have lower monthly payments helping you earn a stronger credit score.
- Consolidate your debt: Consolidating your debt can also be a good strategy if you are having trouble with monthly payments and are accumulating large debt. Under this plan, you combine all of your outstanding debts into one monthly payment. The goal behind consolidation is to reduce the interest you owe, and as a result lower your payments, so you can begin making those payments on time and begin to save money, and in turn boost your credit score.
Following these steps will definitely increase your credit score and demonstrate to a potential issuer that you are reliable.