Your credit scores may not be perfect when you get hitched, but there are plenty of things you can do to improve your rating. Better scores help you qualify for lower interest rates, which are especially important if you hope to buy a home soon. Pay attention to the details as you figure out strategies that will and won't help you boost your scores.
Does an Increased Credit Limit Hurt a Credit Score?
Strange as it may sound, in many cases an increased credit limit actually improves your credit score. This is because a higher limit lowers your utilization ratio, which compares your balance against your total credit limit. However, if you pair your increased credit limit with more spending and a higher balance, then it may begin to hurt your score. You'll not only have the same or higher utilization as before, but you'll also be penalized for owing more money. If you're going to increase your credit limits, keep your spending in check.
Can Goodwill Letters Increase Your Credit Score?
When you make a credit mistake such as missing a payment, this negative information usually remains on your credit report for seven years. The good news is that your lender or credit card company has the discretion to strike the information from your credit report. A goodwill letter is your request to the lender to remove this negative information. If the lender grants your request and follows through, the deletion of the negative information will boost your credit score.
How Much Will Putting Student Loans in Forbearance Increase a Credit Score?
When you're going through financial hardship, one way to lower your monthly costs is to put your student loans in forbearance, which means the lender won't require you to make payments for a time. Changing a student loan from active repayment to forbearance status won't directly affect your credit score at all, but it can have indirect effects. While you're in forbearance, your lender won't report any late payments. Therefore, if you can't afford the payments, forbearance could save you from a credit score hit.
Does Paying More Than the Minimum on a Credit Card Increase Your Credit Score?
Carrying a lot of credit card debt can decrease your credit score, so paying more than the minimum to get rid of this debt almost always increases your score. Credit experts recommend keeping your balance on each credit card at or below 10 percent of your limit on the card. If your balance is currently higher, paying more than the minimum to bring it down should give your score a boost. Plus, you'll be spending less on interest each month and shortening the time it takes to pay it off.
How Much Will the Credit Score Increase After Closing a Debt?
Although making your last payment on a debt brings a big emotional boost, it may not do anything to significantly increase your credit score. You'll see a small benefit because you've reduced the amount you owe, and a little boost to your payment history from the on-time payment you made. A closed account still stays on your credit report, though, with all of its positive and negative history. And be careful: Closing a credit card account can actually lower your credit score if you carry balances on other cards. That's because you'll lose the available credit and end up with a higher total utilization ratio.