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    These Money Habits Helped Me Increase My Credit Score (Even Though I Didn't Realize It At The Time)

    A few healthy habits can go a looooooooong way.

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    Credit scores made no sense to me for like, ever.

    Star Wars / Via giphy.com

    In fact, I'd get overwhelmed whenever I tried to research how to improve my credit score.

    As a literal adult, I figured I should know these things but all that info was just so confusing.

    Since credit scores overwhelmed me, I didn't think about them. Instead, I focused on getting out of debt, which increased my credit score from ~650 to over 750 in about two years!

    Screenshot of my credit score
    Charis Barg / Via experian.com

    It probably increased faster than in two years but I *gasp* didn't check my score that often. Though I admit: Seeing my score improve so much made me curious enough to figure out why. It almost became a little nerdy game to see if I could improve it even more.

    Nowadays, I check my score once or twice a year or whenever the motivation strikes me to do so.

    There are a lot of websites where you can get your credit scores but I check mine through Experian. It's free to sign up and check your score, and I like that it shows my FICO score, which is very often the score a possible lender would look at too.

    Here's how I ~apparently~ used each of the top five factors that can affect your credit score to my advantage.

    Credit score factor #1: Payment history

    My favorite childhood memory is not paying bills

    Twitter: @manlikerex

    If you only have the mental energy to concentrate on one way to increase your score, here it is: Make sure you don't have late or missed payments on your bills.

    Making on-time payments is absolutely crucial because 35% of your score depends on you paying your bills on time — otherwise known as your payment history.

    If you're freaking out 'cause you once paid a bill a few days late, it's not the end of the world. Buuuut, if you have multiple, consistently late (or straight-up missed) payments, then that'll decrease your score.

    What I did:

    Here's how I always paid my bills on time:

    I request electronic bills. Getting a bill in the mail? Ew. I check my emails constantly, anyway.

    I put everything (credit cards, car payments, utility bills, etc.) on auto-pay. This guarantees I won't miss a payment.

    If I move, I update all my addresses. I'd be super pissed if some medical bill got mailed to an old address and I didn't even know about it.

    Also! Experian has a free feature called Boost that can add your regular bills (like utilities, phone bills, and even streaming subscriptions) to your Experian credit report to bulk up your payment history. It connects to the bank accounts and credit cards you use to pay your bills and adds any eligible, on-time payments to your report, which might instantly increase your score. It may not work for everyone but it's free; so if you're worried about your score, it can't hurt to try it out.

    Credit score factor #2: Credit utilization

    Screenshot of my credit card balance at 0
    Charis Barg / Via experian.com

    This factor, which accounts for 30% of your score, relates solely to credit cards.

    Basically, your credit utilization compares the amount of debt you have on a credit card to the card's spending limit. This comparison is calculated as a ratio.

    Here's an example:

    You have a credit card you can put $10,000 on before it's maxed out. If you put $5,000 on it, then your ratio is 50%.

    For a healthy credit score, it's generally recommended to keep your utilization under 30% as much as possible.

    What I did:

    I’m not a fan of math and my eyes glaze over when I read words like “ratios” or “percent,” so here's how I unknowingly increased my score based on this factor:

    I got a credit card. If you don't have a credit card, your credit report won't have any data for calculating this portion of your credit score. Getting a credit card can be a double-edged sword though because you don't wanna rack up debt.

    I paid off all my credit cards. I set a goal to pay down over $40,000 of debt, which included credit card debt. So paying off all my cards meant my ~ratio~ moved down to 0% without me realizing it.

    I keep my old credit cards open even though I don't use them. I don't close credit cards so that my credit limit adds up with each credit card I have, which helps keep my credit use ratio low.

    I occasionally request a credit card limit increase. This doesn’t mean I max out my cards or even come close to it. Instead, I keep my spending the same and my credit use ratio gets even lower.

    Credit score factor #3: Length of credit history

    FOX (Empire) / Via giphy.com

    The longer your credit history, the more data there is on your credit report to show how well you handle loans and bills. This factor accounts for 15% of your score.

    Keep in mind, this factor is an average age of all your open accounts. This means if you have one account open for four years and one open for two, your official credit age is three years.

    What I did:

    There's not much to do with this since it just requires waiting it out. But I did do one thing that helped:

    Instead of closing old credit cards I no longer use, I kept them open. Originally, I didn't close them 'cause I didn't want to only have one credit card in case something happened to it. I was surprised when I learned that keeping old cards open actually helped my credit history (and utilization). Win-win.

    Credit score factor #4: Credit mix

    Screenshot of my credit score profile
    Charis Barg / Via experian.com

    This factor looks at the variety of credit loans that you currently have open. For instance, credit cards and student loans are different credit types.

    The screenshot above is my credit score profile showing that it's been a while since I've had a loan open. If I took one out, it'd show that I can handle multiple types of debt. Adding that would help my score. (But this doesn't mean that I *should* open up a bunch of new loans just to raise my score.)

    Even though it's something I could technically improve on, this only accounts for 10% of your score. So it's something I'm just passively aware of.

    What I did:

    A few years ago, I unknowingly had a variety of debt; I had student loans, a car payment, and credit card debt that I needed to pay off. I was pleasantly oblivious that having that a wide variety of debt helped my score. Making regular, on-time payments on each of those debts added to my payment history, and my credit improved as I paid them off.

    Credit score factor #5: New credit and credit inquiries

    CBS / Via giphy.com

    The last big factor is the number of recent "hard inquiries," which is just an ~official~ word for when your credit score is looked at by an outside creditor. This most commonly happens when you apply for things like a credit card or a new loan. This accounts for just 10% of your FICO Score.

    FYI, in the credit score world, checking your own credit score (aka a "soft inquiry") does NOT affect your score. That's just a myth that needs to die.

    What I did:

    I only applied for credit cards I knew I had a good chance of getting approved for. TBH I did this because of my deep-seated fear of rejection in any capacity. But then I learned that regardless of whether I was approved or denied, each application I sent affected my credit score.

    I waited about a year between requesting new credit cards. Opening new credit cards too often isn't great for your credit score.

    At the end of the day, stressing about your credit score isn't gonna help — but looking at your money habits might.

    The Big Bang Theory / Via giphy.com

    Credit scores are complicated and it takes time and effort to learn! That's why I'm glad my past self didn't think too much about them and instead focused on improving other financial habits like budgeting and tracking expenses, which ended up being the true reason my credit score improved as much as it did.

    Have you had success in raising your credit score? Share your best credit tips in the comments below.

    And for more money tips and tricks, check out our other personal finance posts.

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