Unless you are a financial expert, it is not easy to maintain a good credit score throughout your life. As a layman of credit building, it’s easy to make mistakes and see your score plummet at least once in your life. While it’s not the end of the world, it can still mark a dark period that takes some time to fully be over before you get back to a strong financial foundation.
That is why you must learn how to maintain a good credit score and how to improve your credit score after an unfortunate fall. To assist you during this learning journey, here are credit score secrets that banks don’t want you to know.
You Can Improve Your Credit Score by Co-signing an Account
There’s no denying that credit score plays an important role in loan approval. But so do co-signers. By becoming a co-signer for a friend or family member, you share responsibility for the debt while also benefiting from credit score improvements when loan payments are made on time.
You Can Check Your Credit History For Free
While many banks casually tell you how to check your credit history, the details of how you can get a free credit report often get lost in translation. As of 2023, you are not only eligible for a free annual credit report, but also empowered by the option to get free weekly reports.
You Can Dispute Errors on Your Credit History
Once you check your credit history, you can easily spot errors like incorrectly reported missed payments and dispute them. This gets them removed pretty quickly to boost your credit score. You can use a reminder app to regularly check your report and file for error correction with credit bureaus.
You Don’t Need Multiple Credit Cards to Improve Your Credit Score
Your credit mix is the combination of lending products that you have in your name. Ideally, it should contain at least a revolving credit account like a credit card and an installment credit account like an auto loan. This easy combo makes for a good credit mix and works wonders for your credit score.
You Can Often Switch Account Types Without Closing the Old Account
Closing your oldest account can drop the average age of your credit history and negatively affect your credit score. But if you switch a credit card to a loan or a line of credit with the same provider, you can keep your account history intact and enjoy benefits like better mortgage rates in 2025.
You Don’t Need to Carry Forward Your Credit Card Balance
It is falsely believed that if you carry forward your credit card balance, it could benefit your credit score. In fact, you should make it a point to pay off your credit balances in full with options like a personal savings account. You can then maintain your credit cards without paying sky-high interest rates.
You Can Apply for Multiple Loans Within a Short Time Frame
When you apply for new credit, it triggers a “hard inquiry” that could drop your credit score for about a year. But if you submit applications within 14 or 45 days, you can shop around for credit without multiple inquiries significantly affecting your credit score. However, this depends on which credit score calculation method is being used by certain providers.
You Can Benefit From Secured Cards to Improve Your Credit
Before you can benefit from choosing a student loan or auto loan from private lenders, you need a good credit score. If you have bad credit, you can turn to secured credit cards that are opened against a set prepaid deposit. Once you improve your credit history over time, the provider returns this deposit to you.
You Can Freeze Your Credit to Steer Clear of New Applications
While some companies may legitimately use a student loan repayment program to attract new talent, you can run into bad actors who try to steal your information under false promises. You can easily freeze your credit to keep others from accessing your credit history, which ultimately blocks new applications.
Once you understand these banking industry tips, you can easily use them to your advantage and build your credit score to a good status. This can help you climb through various financial obstacles for a more comfortable life.
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