Credit scores can be a mystery. Unless you work for one of the bureaus, and even if you do, you will not know the intricacies of this carefully and intentionally guarded secret. There are three primary US credit bureaus that produce credit scores; Equifax, Experian and TransUnion. Each of them has their own proprietary algorithm to determine your final credit score which ranges from 300 to 850. Even though we do not know the exact formula, we do know the factors credit bureaus use to calculate the FICO score. This information gives us some advantage to ensure we have the highest possible score. The factors are amount owed, new credit, length of history, credit mix, and payment history. In this post I’ll share 4 simple hacks to boost your credit score.
1. Automate Your Credit/Loan Payments

One way to ensure your credit remains in tip top shape is to automate your credit/loan payments. Payment history is the heaviest weighted factor considered in your credit score. This means that any missed payments can have a big impact on how lenders perceive your credit worthiness. Moreover, life happens and in the midst of things it’s easy to forget a task that we do once a month. Automated monthly payments can save you the hassle of remembering exactly what you need to pay, where you need to pay it and how much you need to pay. This hack is also great because the more history you have of on time payments the higher your credit score.
2. Use Less Than 30% Of Total Credit
Using less than 30% of your total credit lets prospective lenders know you’re not in financial distress at the moment. Credit utilization affects the amount owed factor and to maximize the effect on your credit score you want to use as little of your credit as possible. This advice can be confusing for some because why take out credit if you don’t need it? Well, the US runs on a financial system that encourages and even rewards people who take out credit. Of course, credit owed to you is yours to use but if you’re looking to boost your credit score the golden rule is to use less than 30%. You’ll notice that if you increase your credit utilization you’re sure to see your credit score drop eventually.
3. Limit Hard Inquiries

A hard inquiry occurs when you apply for new credit. Any time you seek credit from a new lender, that organization will want to see your credit history as a borrower. In order to gain this information, they will have to inquire with a credit bureau. Consequently, you’ll see a hard inquiry on your credit report. The more frequent hard inquiries you have the more negative and bigger the impact on your overall credit score. Furthermore, hard inquiries remain on your credit report for about two years. During my research I found that while frequent hard inquiries affect anyone’s credit score, the less credit history you have the bigger the impact. For example, if you have 15 years of credit history (your oldest credit is 15 years) the impact of frequent hard inquiries is less than that of someone with 5 years of credit history. You can limit the amount of hard inquiries to your credit report by:
- Not applying for multiple credit cards in a short time frame
- Be selective about the type of credit you apply for
- Monitor your credit report so you are up to date on your recent inquiries
4. Keep Your Oldest Account Open
Many of us are on a journey to be debt free, but it may benefit you to keep your oldest credit open. Length of history is a good indicator of a person’s financial stability and when paired with on time payments can have a tremendous boost to your credit score. This works best for credit cards. Even if you use the card infrequently, as long as you keep the account open and pay the balance each month this hack is a very simple and easy way to boost your credit score.
My Two Cents

Building a good credit score (>720) is a marathon not a sprint. You cannot magically repair a bad score, but you can repair it quickly if you follow these four simple hacks to boost your credit score. Remember the aim is not to attain a perfect score of 850, it’s to attain a good enough score that will allow you to not only obtain more credit but to do so with less down payment and more favorable terms. Share below if you’ve used any of these 4 hacks to boost your credit score.
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