How to Use Subscriptions to Improve Your Credit Score
Paying your monthly subscription to Netflix, Chewy or your other favorite brands are now, in fact, a subtle way to improve your credit score. It’s estimated that 85% of U.S. households (aka basically everyone) have access to at least one video subscription service. And if you’re the person in charge of paying for it, you can use that recurring monthly bill to help you build your credit score to where you need it.
While you have monthly bills like internet and utilities for your home, subscriptions are considered non-essential — which can demonstrate to credit bureaus that you’re able to pay your bills on time and potentially raise your credit score.
Here’s how you can raise your credit score with Netflix and other paid subscriptions.
How to raise your credit score using subscriptions
The secret-sauce is a quick two-step process:
- Sign up for a credit reporting service
- Aim to pay with a credit or debit card
A credit reporting service such as Experian Boost can give you ‘credit’ for paying the monthly bills you’re already paying, including subscriptions, rent and more. And a service like this can give you further transparency into what makes up your credit score, so using a service like this can be a great addition to your financial toolbelt.
The next part of the equation is to use a credit or debit card to pay for the subscription(s) you’re paying for. This will ensure that you’re receiving ‘credit’ for this. Experian Boost will ask for access to your most recent payment history, and verify that you’ve paid your monthly bill to reanalyze your credit score. In fact, you can have this go as far back as two years. So if you’ve been paying your Spotify, Netflix or other subscription for a while, you can get ‘credit’ for those responsible on-time payments.
Pro tip: Find a great rewards credit card to pay your monthly subscriptions so you can earn valuable cash back or travel rewards along the way to help offset the costs.
What you need to know about credit scores
Your credit score is an essential part of your financial life as it shows banks and lenders how efficient you are at paying your bills on time, as well as managing credit. And if you can responsibly pay your bills on time and manage your credit properly, your credit score will likely increase. And the higher your credit score is, the more likely it is that you can qualify for things like a mortgage, car loan or renting the apartment you want.
But building your credit score is a marathon, not a sprint. Give yourself time and patience to get your credit score to a good place. And while connecting your subscriptions to a credit reporting service is a way to potentially jump your credit score, here are the tried and true ways to build your credit score:
- Always pay your bills on time
- Apply for credit cards and use them responsibly
- If you need assistance, have your trusted friends and family add you as an authorized user to their credit cards
Writers note: I’ve used these methods myself and currently have a 800 credit score.
Unfortunately, credit reporting is not a perfect solution to truly demonstrating your credit worthiness, but it’s the solution we must navigate. So as you’re on your journey, keep these tips in mind:
- Your credit score will go up and down as you navigate life’s hurdles
For example, if you fall into medical debt from an unexpected hospital visit, your credit score may dip. But as long as you pay down that debt in a timely manner, the long term effects should be negligible.
- Ignore the myths online
TikTok and other social media platforms are filled with myths regarding building your credit score. It can be captivating and tempting to try some of the strategies (i.e. paying your credit card twice a month), but 99% of them aren’t accurate. Ignore the noise, and simply pay off your bills in a timely manner.
- Make a habit of checking your credit score regularly
A recent survey states that nearly one-in-four Americans don’t know their credit score. While it’s not something you need to know on a daily basis, it’s important to have a general idea of where you sit financially. Additionally, your credit score is reanalyzed daily, so there’s a potential for it to swing without you even knowing.
As you’re building your credit history, make a habit of checking your score regularly so you can have an idea of where you currently stand. And if there happens to be an error or irregular activity, you can confront it before it becomes a larger issue.
The bottom line
Credit scores are an essential part of your financial life, regardless of where you stand financially. Any large financial transaction will likely require a credit check, and a low credit score could keep you from doing the things you want to do.
It can be difficult to get started, but once you get your credit score to a solid place, it becomes relatively simple to maintain it. While my credit score has periodically dipped, I’ve always paid my bills in full to ensure my credit score always hovers in the excellent range.
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