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Money Stories
Charlotte Zhang

How to Improve Your Credit Score: A Guide for LGBTQ+ Parents-to-Be

When it comes to starting a family, planning is essential. Unfortunately, you can’t always control how plans play out, which can be hard—especially when you’ve saved up to pay for fertility treatments and then realize you still don’t have enough.

However, you do have some control when it comes to getting a fertility loan. While the exact calculation of your FICO score—-the most commonly used credit score— is a secret, you can take steps to improve your score. And though you won’t see your credit score magically rise 100 points overnight, you could see that happen over a few months by making some positive financial moves. 

Why a good credit score is important for fertility loans

Your credit score tells lenders how responsible you are with your finances. Your credit score increases when you do positive things with money, like paying your bills on time and not maxing out your credit cards. When you do the opposite, your credit score drops.  

The better your credit, the better the loan terms lenders offer. For a loan, “better” means a lower interest rate. And while it may not seem like a few percentage points can make a big difference, they absolutely do. 

For example, say your family expects to spend $20,000 on out-of-pocket fertility treatment costs. Here’s a look at how much you’d pay with three different interest rates with a 10-year fertility loan for $20,000. 

There’s a difference of more than $25,000 between the lowest and highest interest rates. Wouldn’t you rather spend a cool $25k paying for future expenses like diapers, daycare and degrees instead of fertility loan costs? That’s why taking some time to improve your credit score today will pay off big, quite literally, for years to come. 

How to improve your credit score

There are several actions you can take to improve your credit score—and none of our recommendations are “watch a few TikkTok videos.” The following steps are credit bureau-approved actions that can help boost your score.

1. Review your credit reports

According to Federal law, everyone is entitled to a free copy of their credit reports every 12 months. Due to the pandemic, credit bureaus currently offer weekly access, so there’s no reason not to review your credit reports regularly.

The easiest way to get your credit report is through AnnualCreditReport.com. You can also request your reports directly from the three credit bureaus, Equifax, Experian and TransUnion. 

Once you have your credit report, review each one carefully to find anything that could be incorrect or harm your score, including:

• Unrecognized accounts

• Incorrect personal information (name, date of birth, SSN)

• Incorrect status on known accounts, like accounts that are open showing closed

• Public records (judgments or lawsuits) that aren’t yours or should no longer be on your credit report

If you find errors on your credit report, follow the Federal Trade Commission's guidance to dispute errors. Disputes must be made in writing and with each credit bureau reporting a mistake. With most bureaus, it’s easy to submit disputes online.

2. Decrease your credit utilization 

Part of your credit score is made up of your credit utilization—how much of your total available credit you’re using at any given time. For instance, say your credit card has a $10,000 limit, and you just bought a new laptop for $4,000. In this case, your credit utilization is 40%. You want your credit usage to be under 30% of your total credit limit for an optimal credit score. 

Credit bureaus add the available credit and balances from all your credit cards to determine your credit utilization. To decrease your utilization, create a strategy to pay down each card until you only use 30% or less of your available credit.

3. Ask for a higher credit limit

Another way to help improve your credit utilization ratio is to ask for a higher credit limit on your credit cards. This is generally simple and takes less than five minutes on your computer or smartphone. 

When logged into your account, look for a link that says “credit line increase” and submit the required information, usually about your income. Approvals and denials are generally instant.

It’s best to limit requests for credit line bumps to every six months and start with an amount of around 10% of your current credit limit. If you’re denied, don’t sweat it. Wait a few months before trying again. 

4. Keep your payments current

On-time payments are essential in keeping your credit in tip-top shape since your payment history accounts for 35% of your credit score. One late payment five years ago shouldn’t worry you, but if you’re consistently late on paying your bills, this signals to lenders that you are a higher risk. 

Consider setting up automatic bill payments to avoid late payments and pesky fees. Also, if you have an account that’s past due, pay the bill immediately. If the outstanding balance is too large to pay in full, contact the lender to work out a plan to bring the account current. 

5. Keep inquiries to a minimum

Every time you apply for credit, it creates a hard inquiry on your credit report. While one or two inquiries per year won’t likely have a big impact, multiple inquiries—especially in a short time—can ding your score. Why? Because lenders may think you’re accumulating too much credit and living beyond your means.

To boost your score, keep inquiries to a minimum. Once inquiries are over a year old, you’ll typically see your score tick up, provided you haven’t added any more to your report.

6. Keep old accounts open

The length of your credit history accounts for 15% of your credit score, so it’s a good idea to keep your oldest credit account open for as long as possible. With a credit card, this is pretty easy. It may not be a great cash-back card, but use it to pay for a monthly subscription or bill to keep it active.

If your oldest account is a student or car loan, and you’re close to paying it off, try to hold off until you have your fertility loan in place. If you’ve been paying it down aggressively, switch to making just the minimum payments.

7. Explore additional ways to build good credit

While on-time loan and credit card payments contribute to your credit score, two other payments generally do not: rent and utilities. But thankfully, times are changing, and it’s sometimes possible to use these two bills to boost your score.

Some landlords offer payment processing solutions that will report your rent payments to the credit bureaus. But if they don’t, you’re not totally out of luck. You can use Experian Boost, a free service that’s simple to set up. When you connect your bank accounts to Boost, the service automatically looks for qualifying payments to add to your credit profile. All you have to do is verify that the info is correct and want it reported. 

Payment reported through Boost will only be shown on your Experian credit report, not the other two. However, using Boost is a small action that could potentially create a big win for your credit score.

8. Monitor your progress

There are plenty of ways to track your credit score without paying for a credit monitoring service. Many banks offer free credit trackers via their online banking functions. You can also use a free service like Credit Karma. After the signup process, Credit Karma will give you an overview of your accounts, including your utilization rate for each account and recommendations for improving your credit.