However, when it comes to short-term solutions, the options are admittedly limited. MainStreet talked to credit experts to see what type of tactics actually work to help consumers boost their credit scores.
DO run your credit report before you apply for a loan.
Gabrie isn’t the only person to have an inaccuracy appear on his credit report. According to Lin, about 30% to 40% of all credit reports have some type of error on them and often their removal can significantly boost a person’s score. As such, those who know they will be soon in the market from some new credit should pull their score (you are entitled to one free report a year from each of the three reporting agencies, at Annualcreditreport.com) and scour it for incorrectly attributed delinquencies, accounts or inaccurate balances, which can skew your credit to debt ratio and drop your score.
However, trying to find others’ mistakes shouldn’t be the only thing you do once you have your current report in hand. You’ll also be able to spot what you did to deserve a score that could be improved upon.
“After you pull your report, you’ll know exactly what’s making your score go down,” Quinn says, explaining that, while they may do nothing to affect your score in the short-term, it can help you develop a long-term strategy for achieving more desirable results.
DON’T increase your amount of available credit in an effort to boost your score.
People commonly believe that they can make up for a poor credit utilization ratio – the credit you have available to you (in the form of credit lines) versus the amount you have actually used (balances) – by adding more credit to an already existing, but nearly maxed out credit line. It may improve that ratio, but all of our experts agree that this is likely to do more damage than good.
“You’ll lose points for taking on the new credit,” Quinn says, explaining that the exact amount of points you’re likely to lose will vary depending on how many credit card inquiries you already have on the books over the last year. (Generally speaking, the more inquiries, the greater the negative impact will be.)