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7 Ways to Improve Your Credit Score in 2020

Victoria Araj3-minute read
UPDATED: April 12, 2022

As we approach the new year (and the new decade), you may be interested in improving your financial situation. A great place to start is with boosting your credit score.

With an improved credit score, you can get lower interest rates if you’re looking to borrow money in 2020. That way you can get that dream home of yours for a lot less money!

To improve your credit score in 2020, here are seven tips that can set you on the right path:

Sign Up For Autopay

Your payment history counts for 35% of your overall credit score. When you miss a payment, you can severely affect your overall credit score.

By signing up for autopay, missed payments can be a thing of the past. Contact your creditors (credit card company, car loan provider, etc.) and find out how you can sign up for their autopay feature. This process can usually be done easily online and can save you a lot of heartache.

Develop A Monthly Budget

By deciding how you are going to use your income in advance, you are making a plan for your money. A monthly budget helps make this process easy.

Schedule time at the beginning of the month for this life-changing financial activity. If you schedule it on your calendar (just like an important meeting or doctor’s appointment), you’re more likely to get it done.

Use an online budgeting tool like Mint, Tiller or YNAB to make the process easy. Or if you prefer to keep it offline, grab a pencil and paper and make it happen. You’ll want to write down how much you have coming in (income) and then estimate how much is going out (expenses).

Be sure to include the proper amount for your debt payments so you’re paying your bills on time. This consistent and disciplined approach to your money will help boost your credit.

Try A “No Spend Challenge”

If overspending is your vice, try going cold turkey.

Analyze your spending problem areas. They may be indulgences like online shopping, eating out at restaurants or expensive hobbies. Take one week where you don’t spend on any of these things. It may feel odd, but a “no spend challenge” like this could do the trick.

Is a week not enough of a challenge for you? Try a month!

When you’re able to eliminate overspending and start paying your bills on time, your credit will soon increase (and your bank account balance will too)!

Set Up Balance Alerts

One trick to boosting your credit is keeping your credit utilization to less than 30%. For example, if you have a $10,000 credit limit, keep your spending to less than $3,000. By doing this, you are proving to your creditors that you are a less risky borrower.

When you create balance alerts, you are giving yourself a heads up that you’re approaching that credit utilization zone of higher than 30%. Contact your creditor to see how you can get balance alerts set up.

When you get your credit utilization low through balance alerts, you’re automatically improving your credit score. This factor counts for 30% of your overall score.

Increase Your Credit Limit

Another quick way to keep your credit utilization lower than 30% is to request a higher credit limit. This can happen by contacting your creditor directly.

Increasing your credit limit may be a slippery slope if you allow yourself to borrow more. More accessible credit may mean more debt for you in the long run. Be careful, track your spending and don’t spend more than you’re bringing in.

Create An Emergency Fund

As they say, cash is king. When you have a pool of cash in a savings account, you can use these funds to cover yourself in an emergency. This will keep you from paying for your emergencies with credit.

Your emergency fund will help you to keep your credit utilization low and pay your bills on time. Aim for a goal of one month of expenses in a savings account. This may take a year or more, but it’ll be worth it in the long run.

Track Your Credit Score

You won’t be able to improve our credit score if you’re not tracking it. If you want to track your credit score for free, check out Rocket HomesSM

You’ll not only get your credit score for free through TransUnion®, but you’ll get helpful tips on how to improve it. The credit report feature shows your current open accounts, closed accounts and any hard inquiries associated with your credit profile.

The more information you have, the better equipped you’ll be to boost your credit score.

Here’s to a happy new year and a high credit score!

Victoria Araj

Victoria Araj is a Section Editor for Rocket Mortgage and held roles in mortgage banking, public relations and more in her 15+ years with the company. She holds a bachelor’s degree in journalism with an emphasis in political science from Michigan State University, and a master’s degree in public administration from the University of Michigan.