9 Quick Hacks to Improve Your Credit Score in the Netherlands

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9 Quick Hacks to Improve Your Credit Score

Your credit score is an important number that will determine the quality of many of the financial factors that will become a part of your life. Everyone wants a high credit score, but to some it seems too difficult. To get a perfect credit score follow these 9 Quick Hacks to Improve Your Credit Score in the Netherlands.

Pay your credit cards twice each month

Even if you pay your balances in full every month, using up too much of your available credit at any given time can hurt your scores. You can lessen the damage by making two payments each month: one just before the card’s statement closing date and another just before the due date.

The first payment typically reduces the balance that’s reported to the credit bureaus, while the second assures that you don’t wind up paying interest or incurring a late fee on any remaining charges.

9 Quick Hacks to Improve Your Credit Score

Keep your credit utilization below 30%

Credit utilization is a fancy way of saying how much available credit you have. For example, if you have one credit card and it’s maxed out, then your credit utilization is high, and this will have a negative impact on your credit score. The magic number seems to be about 30% .

Here are three ways to keep your credit card utilization ratio below 30%:

  • Only charge essential purchases like gas and groceries—or those that earn bonus points
  • Split your purchases between multiple credit cards
  • For large one-time purchases, make extra payments during the billing cycle.

Use a retirement savings plan to lower your credit utilization

This is a great option because retirement plan loans aren’t reported to the credit bureaus. This hack comes with a caveat, however, because retirement plan loans are deducted from your pay check, so this is only a viable option if you can manage the lower salary.

Reduce your debt-to-income ratio as well

Debt-to-income ratio is a pretty basic concept: it’s the amount of debt you have versus the income you’ve got coming in. The higher the ratio, the lower your score will go.

To figure this number out, combine all your monthly debt payments and divide the sum by your gross monthly income. When it comes to a mortgage, the max you can have is 43%, because anything above that and you won’t get approved.

Fix Credit Report Errors

Sometimes, banks make reporting errors that hurt your credit score. Even if you haven’t missed a payment, many consumers overlook the benefits of a periodic credit report review.

Reviewing your credit report is free and only takes a few minutes. You can request free credit reports  weekly.

If you find an error, you will need to file a dispute with the credit bureau. No error is too small to dispute. I’ve disputed incorrect phone numbers, which are correctly in minutes, which led me to discover unauthorized accounts (a cell phone).

If the error affected your score, you should see a pretty quick change once the credit bureau corrects the error.

9 Quick Hacks to Improve Your Credit Score
Credit Score

Don’t be afraid to use the credit you already have

It’s important to point out that having credit and not using it isn’t a wise approach. Your credit history is based on your pattern of using credit and paying it back, so if you don’t use any credit, you won’t have a score to speak of.

Using credit cards and paying back small loans quickly can actually improve your credit score. Having both revolving and tradeline debt is something called mixed credit, and it’s good to have.

The idea behind this is that lenders want to know that you can handle different types of debts and payments, which is why mixed credit is a good thing that can improve your score.

Get added as an authorized user on someone else’s account

Another person’s good history with their credit card could be imported into your credit bureau files to help burnish your scores. Plus, the other person doesn’t have to give you access to the account — you can be an authorized user in name only. Some card companies will allow this importing only if you’re a relative, so check in advance.

Leave your bills on autopilot

Because you’re human, you’re bound to be late on payments at some point. A great way to avoid being late is by setting up automatic payments for your bills. Nowadays, most large banks have a “bill pay” feature that allows you to set up recurring payments.

Review your credit billing history and write down bill due dates on a separate sheet of paper. Be sure to have a good understanding of your cash flow to know how much money you’ll have left over each month. Use the remaining amount to make extra credit card payments.

Praise your Credit history

Don’t close good standing credit cards. Good standing credit cards show lenders you’ve been able to make payments on time for an extended period.

Instead, if you decide to no longer use a credit card, leave it home somewhere out of sight.

Do close credit cards that are charging you annual fees or have a short history. Be sure to do this during a period you won’t be making large purchases.

These 9 Quick Hacks to Improve Your Credit Score can quickly increase your credit score – try one today and let us know in the comments how it turns out the next time you check your credit score.

Learn more about managing money by going through Top 5 Points That Every Young Investor Should Be Mindful of While Investing.

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