If you want to increase your credit score, you need to make timely payments on all your debts, keep your credit card balances low, and wait for all that good credit history to slowly increase your score over time. Law?
Well, as the Motley Fool reminds us, there’s an oft-overlooked step you can take if you want to improve your credit score fast: request a credit limit increase.
When you ask your existing creditors to increase your line of credit, you are simply asking them to increase your credit limit and give you more credit.
This can have a positive impact on your credit utilization ratio, which is one of the most important components of your credit score. Credit utilization rate is second only to payment history and represents 30% of your score in Fair Isaac Corporation’s FICO® score formula.
As Motley Fool’s Christy Bieber explains, many people don’t realize they can contact their credit card company and ask for a credit limit increase. (Many banks even let you apply online, so you won’t have to wait with customer service.) This type of application usually doesn’t involve a strain on your credit, which means it doesn’t It probably won’t hurt your credit rating and if a credit limit increase is granted, you can expect an increase in your credit rating.
Of course, this score boost will go away if you turn your credit boost into new debt, so don’t spend your extra credit. Instead, use it to keep your credit utilization rate as low as possible and your credit rating as high as possible.
Then you can go back to your usual routine of on-time payments and low balances, and continue to build your credit history until you finally get that perfect credit score.