5 Best Ways to Improve Your Credit Score in 2020

Best ways to improve credit score

A good credit score is one of the prerequisites for a sound financial future. Why? It can grant you access to the best credit cards, lower interest rates on loans, and may even influence your job prospects in certain industries. This is why you should do whatever you can to improve your credit score. It may seem like you need a lifetime to boost your credit score because factors such as age of credit, timely payments, and credit inquiries come into play. Yet, there are ways to improve your credit score quickly. So if you want to overhaul your credit score in 2020, here are some of the best moves you can make.

How to Quickly Improve Your Credit Score in 2020

  • Make timely payments. That’s the first and foremost rule if you wish to boost your credit score. But when you have multiple bills to pay, missing a payment can be easy. To avoid this, set up autopay. This will ensure that all your bills are paid before the due date. However, if you’re not sure you can make full payments every month, autopay may not be a suitable option. In this case, set up a payment reminder. You can either set up reminders on the bank website or use your Outlook or Google calendar. 
  • Pay-off balances one by one. It doesn’t matter whether you pay the small balances first and then tackle bigger debts or vice versa, but start paying off your debts one by one. Once you start paying off the balances, try to increase your payments as much as you can. This will not only bring down your interest payments but also reduce your principal costs. Paying off substantial credit balances can quickly boost your credit score. 
  • Consider a personal loan to consolidate your revolving debt. A low-interest, unsecured personal loan can help you pay off revolving debt, such as credit cards. This is an easy way to improve your credit score since an installment loan is not included in your credit utilization ratio. It also makes repayment easier by allowing you to make a single monthly payment as opposed to multiple payments. 
  • Open a new line of credit. Another quick way to boost your credit score is to open a new line of credit. For instance, a new credit card instantly boosts your credit usage ratio. It also helps you build a stronger and longer history of credit in the long run. 
  • Eliminate tax liens. Although as of April 2018, tax liens were removed from all credit reports, this policy is always subject to change. Furthermore, they can give the federal government the right to seize your assets or garnish your wages. However, with Fresh Start, a program by IRS you can settle your tax liabilities for less than you owe or even have the lien withdrawn. The IRS will evaluate your income and assets and determine if you are eligible. This can free you up to focus on paying off your other debts.

Improving your credit score may seem overwhelming and time-consuming. And there is no magic trick to achieve a great credit score overnight. It will definitely take time and effort in addition to patience and commitment. Nonetheless, if you are diligent and make timely payments, you will watch your credit score soar in 2020!