If you want to boost your credit score, you better make on-time payments on all of your debts, carry low balances on your credit cards, and wait for all of that good credit history to slowly raise your score over time.
Right?
Well, as the Motley Fool reminds us, theres one often-forgotten step you’ve got the option to take if you want to improve your credit score quickly:requesting a credit limit increase.
When you ask your existing creditors to increase your credit line, youre simply requesting that they boost your credit limit and make more credit available to you.
Doing 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 ratio
is second in importance only to payment history and it accounts for 30% of your score in the Fair Isaac Corporations FICO Score formula.
As the Motley Fools Christy Bieber explains, many people dont realize that they can contact their credit card companies and ask for a credit limit increase.
(A lot of banks even let you make the request online, so you wont have to wait on hold with customer service.)
This throw in of request doesnt usually involve a hard pull to your credit, which means it probably wont hurt your credit scoreand if a credit limit increase is granted, you could expect a credit score bump to follow.
Of course, that score bump will disappear if you turn your credit increase into new debt, so dont spend your extra credit.
Instead, use it to keep your credit utilization ratio as low as possible and your credit score as high as possible.
Then you might go back to your usual routine of on-time payments and low balances, and continue to grow your credit history until you finally achieve that perfect credit score.
