The desire of gold is not for gold. It is for the means of freedom and benefit.

Ralph Waldo Emerson

Your credit score plays a crucial role in your financial strength. If you find that your credit score is lower than you’d like, fear not! By following a few straightforward steps, you can improve your credit and enhance your financial power. Here are four effective strategies to get you started:

1. Pay More Than the Minimum Balance:

Paying only the minimum balance on your credit card each month could be holding back your credit score. Many households end up paying an average of $1,200 in credit card interest each year. Instead of falling into this trap, consider paying more than the minimum required amount. By doing so, you demonstrate responsible credit management to lenders and give your credit score a positive boost.

2. Always Pay Bills on Time:

One of the most critical factors in building a strong credit score is consistent on-time bill payment. This aspect showcases your financial responsibility and assures lenders of your reliability in repaying borrowed funds. To ensure timely payments, break down larger bills into manageable chunks, if necessary. By staying current on your payments, you avoid late fees and penalties while building a positive credit history.

3. Benefit from Becoming an Authorized User:

If you lack a positive credit history, becoming an authorized user on someone else’s account could be a game-changer. Partner with someone who maintains a strong track record of timely bill payments and low balances. Being an authorized user on their account won’t affect their credit score but can significantly improve yours, especially if they have a good credit score of 720 or above. Remember, there are no fees involved in being an authorized user, and this method can set you up for credit success, just as it did for me when my Mom did it for me as a child.

Disclaimer: Ensure you are responsible for all charges made on the account. Only become an authorized user if you trust the primary account holder and are confident in their financial habits.

4. Request Higher Credit Limits:

If you feel that your current credit limit is too restrictive, don’t hesitate to ask your creditor for an increase. A higher credit limit can make it easier to responsibly use your credit cards, leading to long-term credit score improvement. Moreover, it can positively impact your credit utilization rate—a key factor in credit score calculations. Keeping your credit utilization below 30% is generally recommended, meaning that if you have $10,000 in available credit, your outstanding balance should not exceed $3,000. The lower the balance, the better for your credit score.

Incorporate these simple yet effective tips into your financial routine, and you’ll witness a notable increase in your credit score in no time! Building good credit is an essential step toward achieving your financial goals and securing a brighter financial future.

Stay frugal, be brilliant!