Skip to main content
Hometap home
Financial Goals

Boost Your Credit Score, Boost Your Financial Health

4 min read
Header Image
picture of author, Hometap TeamBy Hometap Team on August 9, 2019

Last updated March 29, 2023

Improving your credit score can give you access to better rates on your mortgage, better offers on a new loan, and better financial opportunities overall. We’ve rounded up the top five tips that will help you boost your credit score fast.

1. Check Your Credit Score Often

My FICO advises you carefully review your credit report from all three credit reporting agencies. Check for errors and dispute inaccurate information by contacting both your lender and the credit reporting agency.

You can monitor your credit on sites like Free Credit Report that allow you to keep tabs on your credit in real-time.

Do you own a small business? Try these strategies to fuel your business’s credit growth »

2. Close to Your Credit Limit? Pay It Off

Even if you pay your credit card on time, every time, you may be negatively impacting your credit score if you have a balance that’s more than 35% of your credit limit. That means if you have a card with a $10,000 limit, you’ll want to keep your balance under $3,500.

3. Don’t Close Old Accounts

While your credit history stays on your credit report for seven years, closing a card if you still have balances on other cards increases your credit utilization ratio. So, if you have three cards totaling $20,000 in credit and you have $5,000 of charges among them, that’s a 25% utilization. If you close a card and you have $15,000 of credit with a balance of $5,000 among those two cards, you have a 33% utilization. That may reduce your credit score. Check out our video on how credit utilization works.

Lenders also may look favorably on those with an older “credit age,” or the average age of your credit accounts. If you close that account you opened in college, it makes your credit age appear younger.

4. Open Up a New Credit Card

Opening a new card can not only increases your total credit line (improving your credit card utilization mentioned above) but also shows the credit bureau that you have the ability to manage different types of credit. For example, taking on a car loan or opening a credit card account with a store diversifies your “credit mix.” Just make sure you know the interest rate, signup fees, and any additional costs involved.

5. Stay Under—Well Under—Your Credit Limit

Just in case you skimmed over point number two, it’s important to keep your credit utilization low. Opening a new credit card doesn’t mean you have to go on a spending spree. You’ll want to monitor both your per-card and overall credit card utilization.

When you boost your credit score, you’ll find you unlock new opportunities for improving your financial situation. For example, a good credit score allows you to access loans with better interest rates and tap into the resources you already have, such as the equity built in your home.

Of course, staying below your credit limit and paying off high balances means tackling your bad debt. Start paying down debt (and improving your credit score) with your copy of The Homeowner’s Guide to Leveraging Good Debt and Eliminating Bad Debt.

The more you know about your home equity, the better decisions you can make about what to do with it. Do you know how much equity you have in your home? The Home Equity Dashboard makes it easy to find out.

You should know

We do our best to make sure that the information in this post is as accurate as possible as of the date it is published, but things change quickly sometimes. Hometap does not endorse or monitor any linked websites. Individual situations differ, so consult your own finance, tax or legal professional to determine what makes sense for you.

Related Tags:

Credit card debt
Hometap is made up of a collaborative team of underwriters, investment managers, financial analysts, and—most importantly—homeowners—in the home financing field that understand the challenges that come with owning a home.

More in “Financial Goals”

home office with large windows overlooking city
Financial Goals

Understanding Which Home Improvements Are Tax-deductible

10 min read
modern kitchen with green cabinets
Financial Goals

Kitchen Design Trends to Consider for Your 2024 Renovation

8 min read
minimally decorated bright living room
Financial Goals

7 Brilliant Home Staging Tips from Staging Experts

7 min read