My credit rating is excellent and has been for a long time. Although it fluctuates, it is well above 800. This means that I can generally qualify for affordable loans and have my choice of lenders when applying for a mortgage or a new credit card .
There are a number of reasons why I have such good credit, including my unwavering commitment to always paying my bills on time. But there is one simple move I made that I think made a big difference in boosting my score to such a high number. Here is what it is.
It has helped me improve my credit score significantly
One of the best decisions I’ve made to get a good credit score is to consistently ask for line of credit increases whenever I get the chance.
Card issuers generally allow you to request line of credit increases without a firm credit check, so you don’t hurt your score by doing this. You can usually do this online. With my accounts, the option to request one pops up every few months or so, and as soon as I see this pop up on my online account, I ask for a raise.
There’s a good reason I’m doing this. You see, while payment history is the most important factor in determining your credit score, your credit utilization ratio is the second key factor that affects your score. The credit utilization ratio is calculated by dividing credit used by credit available. So basically if you had a line of credit of $100 and billed $50, you would have a utilization rate of 50%.
If your credit utilization ratio exceeds 30%, it can affect your score. But if you have a lower ratio, it can help your score. And requesting line of credit increases has ensured that my ratio is always well below 30%.
Here’s why asking for line of credit increases has been so helpful
I don’t have a balance on my credit cards, so in theory this should mean that my credit utilization rate would always be very low, regardless of the size of my lines of credit.
But the problem is that card issuers report your usage at a specific time of the month which may not correspond to when your bill was paid. Plus, I’m constantly loading things onto my cards since I put all my purchases on them to earn rewards. This means that no matter when my card issuer reports my balance to the credit bureaus, I will always be to have a balance even if I pay my statement in full.
Since I want to make sure the balance is well below 30% of available credit, I’ve repeatedly requested line of credit increases so I don’t have to worry about how much I’ve spent on my map. I now have a line of credit of $95,000 on one card and $15,000 on another. Since my credit limits are very, very high, I can charge a lot to earn rewards and still have a low usage rate which helps my score.
It’s one of the easiest ways to improve your credit score because it only takes the click of a few buttons. If you see the option to request a credit limit increase on your own accounts, it’s probably worth doing.
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