Ever Heard of These Lesser- Known Methods to Improve Your Credit Score?

Last Updated : Jan. 21, 2025, 12:29 p.m.

Your credit score is an important aspect in your financial life. A good credit score is required for multiple reasons in your life. The credit score is a prime factor that lenders look into to approve your loan and credit card applications. Besides this, a good credit score is important to obtain low interest rates, the desired credit limit, the desired amount, and insurance application approvals. Although not widely practiced in India, some employers may require your credit score for giving you a job. Also, some landlords may ask your credit score to rent out an apartment to you. Due to its importance, it is essential to maintain a good credit score and enhance it. Let us now understand some unconventional methods to improve the credit score.

Lesser Known Methods to Improve Your Credit Score

Utilize Good Credit Histories

You can use a family member’s or friend’s good credit history for your credit score to go up. You can add yourself to an account which has a good credit history. Family members and distant relatives can be added to most of the credit card accounts. You will be an authorized user on the account and able to make purchases and pay the bills.

Set up Auto Payments and Payment Alerts

Auto payments should be set up to avoid defaults in payments. On setting up an auto payment alert, the money will get deducted automatically from your account to pay the EMI or the credit card bill. You can also set up payment alerts to remind you to pay the debt.

Pay Credit Card Bills More Often - More than Once a Month

Credit scores are impacted by the debt utilization ratio. This is the ratio of how much debt you have to the size of your credit limit. One of the ways to improve credit scores is to lower the debt utilization ratio. So, it is ideal to pay off your debts more often. Paying your credit card bills more than once a month can help you decrease the debt utilization ratio.

Keep Old Accounts Open

The length of credit history has a great impact on your credit score. The longer the age of accounts, the higher your credit score. So, it is ideal to keep older accounts with good credit history open. They show your long association with lenders and your history of maintaining financial discipline. Credit scores can decrease if you close accounts. Plus, these old accounts add to the total credit limit, thus decreasing the percentage of available credit used. This lowers your credit score.

You Can Request for Deletions

You can ask credit bureaus and lenders to delete entries of late fees, late payments, or unpaid bills which impact credit scores negatively. If you have maintained a good credit history previously, then these may be deleted. However, this will usually work only if you are a long term customer with few issues.

Avoid Pre-Approved Offers

Sometimes pre-approved offers come to your mail. These usually tempt you to apply for credit. However, each time you apply for credit, a hard inquiry will be triggered. Multiple hard inquiries will impact your credit score negatively. It is also easier to manage a lesser amount of loan and credit card accounts.

Establish Long Term Relationships

Sometimes, you will be lured to shift to new companies that promise lower interest rates for a few months. Instead of changing, stay with the current lenders. This is because credit scores are impacted positively by longer credit histories with lenders. So, although you may be tempted to take up lower interest rate offers, your credit scores may suffer.