The easiest way to juice up that credit score often has everything to do with credit utilization. That’s the percent of your credit that’s available for you to use. It makes sense here that your credit utilization would have a major impact on your credit score. If you have a bunch of credit available, it means you can get out of a short-term jam without too much trouble. Think about having an unexpected $500 bill that pops up one day. Those of us with thousands of dollars in credit available wouldn’t have to worry so much about taking care of this unexpected bill, while others with no credit available could be in major trouble.
There are two aspects to that credit utilization number, you’ve got the amount of credit you’re using and your credit limit. I always used to get in a situation where my credit score took a hit because I would never time things right. What I mean by that is, I’d pay down my card after the statement hit, rather than paying it, not using it for a week, then allowing the statement to reflect a lower balance. Managing these balances is a major key.
For example, let’s say I have a Visa card with a $1,000 limit as my only credit card. If I ran that card up to $850, then paid it in full, but used it again before the statement date, pushing it back to $850, then my credit utilization would be 85%. That’s no good, as you get the best credit score when your utilization is down under 15%. I can game the system by paying off my car but then waiting until the statement comes out, then using the card just like normal. This little bit of timing can push up credit scores anywhere from 25 to 50 points!
The other aspect is your credit limit. Here’s the bad news though, credit card companies won’t increase your limit when they see your utilization is high. It’s a Chinese finger trap that can get you stuck. One trick you can do is to pay down the card, let the statement hit, and then ask for a limit increase. This will help keep your utilization down as long as you don’t put too much money back on the card.