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How to Improve my Credit Score

Not only is a credit score used to determine eligibility for a loan or credit card, but it also opens doors to many opportunities.

A higher credit score can qualify you for financial advantages such as credit card rewards with perks like cash back and no ATM fees. It can give you the negotiating power to lower rates, waive security deposits, and more. Read this article to learn more about the importance of your credit score.

You credit score can fluctuate as often as once a month depending on your level of financial activity. You can raise your credit score in a variety of ways:


Pay your bills on time.

This is very important. Your individual payment history plays the largest role in your credit score because it reassures lenders that you have a history of making payments on time and that they can rely on you to make timely payments on future loans. Even small mistakes can affect your credit score. A good rule-of-thumb is to always make at least the minimum payment by the due date. You can set up alerts and notifications for payments or schedule automatic payments to eliminate late or missed payments.

Never close old credit card accounts.

Your credit score factors in your entire credit history going back to your very first credit card, including how long you’ve held an account and when you’ve used them last. Even if you don’t use a particular credit card often, closing the account entirely isn’t always the best answer because it could lower your credit score. With older credit cards we suggest you use them every once in a while to keep them active. There are exceptions to this – for instance, if your credit card comes with a pricey annual fee then it might be in your best interest to close it out if you aren’t using it.

Increase your credit limit.

On your existing credit cards, consider increasing your line of credit. For example, say your credit card limit is $1,000. If they allow you to raise this limit to $2,000, then you’ve proved to them that you are trusted with a larger loan – which will positively affect your credit score. As long as your account is in good standing, you will likely be granted this request.

Remember: It boosts your credit score if you carry less debt overall, so don’t spend this full amount. Typically, try not to spend more than 30% of your available credit.

Diversify your loans.

When determining your credit score, it’s better to show that you are capable of managing multiple accounts simultaneously (like a credit card, auto loan, and mortgage). This does NOT mean you should go out and open a bunch of new accounts to boost your score, this will in fact hurt your score because it comes across to lenders as financially unstable. With that said, it’s very good practice to have a variety of different credit cards and loans opened over a period of time that you pay off regularly.

Credit Builder Loan.

Alltru offers a Credit Builder Loan that is specifically designed for those with little to no credit and works to build or improve your credit score. Our Credit Builder Loan is essentially taking out a loan with us, paying it off monthly, and then the money is released back to you. We strongly encourage those who have a colorful or varied credit history or have a lower than average credit score to take advantage of this excellent credit building opportunity that is unique to the financial industry. Our Credit Builder program has enabled people throughout St. Louis to improve their credit and set themselves up for financial success.

Let’s help you get on track to achieving your financial goals!

Make an appointment with an Alltru specialist to talk through the different options available to you.