There’s no doubt about it—your credit score is an important component of your credit history and low scores can keep you from acquiring new stuff—cars, homes, appliances, even furniture. Some extreme tactics can work short term, but they’re not always the smartest route to take.
Here are five the experts say could work… with a few drawbacks.
EDITOR’S NOTE: If you are new to the world of credit cards, you might want to first wrap your head around credit card jargon.
1. Multiple Credit Accounts
Sometimes you need a new credit card with a zero interest rate to help pay off your debt. That’s a good thing.
Dorothy Barrick, a financial counselor at GreenPath Debt Solutions, says opening multiple cards can build up your credit as well, just don’t use all the credit available to you. That takes a lot of discipline, but you need to keep the cards active or they’re meaningless on your credit report.
But be warned! Becky Walzak, president of the Looking Glass Group, says unused cards can be a magnet for identity theft because thieves assume you’re not paying attention to the statements.
2. Home Equity Credit Line
The strategy of using a home equity line of credit to pay off a loan or second mortgage makes sense. But, in reality, it’s really just moving debt from one place to another. “People who have a home equity line of credit will use it to pay off their credit cards and think that’s going to raise their scores,” Walzak says. On the plus side, opening a new line of credit will increase your available credit and lower your utilization ratio. It can, however, backfire on you big time if you ever file for bankruptcy. In the end, you could just be trading one unsecured debt for another.
3. Pay Bills Twice a Month
You’ve just paid off your monthly credit card statement, but you’ve racked up a huge amount for the next month. If you have the money now and are afraid of spending it before the due date, can you make two payments in one month? Anthony Sprauve, director of communications for myFICO.com, says yes— but wait until the end of the month since high balances could look like high debt utilization. Sprauve uses this tactic himself to pay off a travel credit card that accumulates high balances.
Just make sure you have enough money to pay your other bills before you next paycheck comes. And, always keep a few hundred in your checking account for emergencies.
4. Add an Authorized User
It’s a risky move, but getting someone with a stellar payment history to add you as an authorized user to their credit card could skyrocket your credit score.
The risks, of course, lie with the primary user on the account. If they don’t pay their bills or unexpectedly lose their job and miss payments, you’ll pay the piper too. Ethically, you should be paying them back for all your charges, but the bat swings both ways. Barrick says that only you can decide if this method will help your credit history long-term.
5. Paying When No Payment is Due
It doesn’t make sense—why would you overpay your credit card payment? Financial planner Antonio Filippone explains: “Your debt utilization ratio is very important to your score. If you owe $4,900 on a card with a $5,000 limit, you have a bad ratio, but if you owe $1,000, the ratio is off the chart in your favor. Any extra applied to the card would eventually be sent back to you or you could just charge something to break even.”
Barrick gives this method to raise your credit score a thumbs down, explaining that credit card companies are likelier to simply send you back the extra funds than add them to your line of credit. In the end, “Zero is the best you get on a balance.”