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How To Bring Your Credit Score Up

Reduce The Amount You Owe

How to Increase Your Credit Score Fast in 2021

Lenders want you to borrow but not too much. Typically, lenders start to raise their eyebrows when you use more than 30 percent of your available credit on all your credit cards. This is measured by what’s called a credit utilization rate how much credit you’re using divided by the total amount available to you and a low one means you’re probably doing a good job of budgeting. Credit utilization is 30 percent of your FICO score.

And having too little activity can be a problem as well, Griffin says, because if you need a loan, the lender will want to see that you have used credit wisely in the past. Even if you don’t have a credit card, you can ask that utility bills or other regular bill payments be added to your credit report.

For fixed-rate loans, such as home loans or car loans, lenders look at your debt-to-income ratio, which reflects how much of your annual income goes to paying debt. It’s the amount of your monthly debt payments divided by your monthly income. Your debt-to-income ratio doesn’t affect your credit score, but if it’s too high, you might not get many credit-card offers, and it might be harder for you to get a car loan or mortgage.

If you have a card that’s maxed out, or close to maxing out, then pay it down aggressively. You might even consider diverting some money from savings to pay down your credit card. All things being equal, paying down a credit card that charges 18 percent interest is about the same as earning 18 percent on an investment.

Get Rid Of Negative Information

Removing negative information from your credit report can boost your credit score, but erasing things from your credit report isnt easy. You can dispute negative entries that are inaccurate, wait for the credit reporting time limit to pass , or try to get the information furnisher to remove the entry from your credit report with a pay for delete or goodwill offer.

If you want to dispute information on a credit report, you may need to send a dispute letter to both the institution that provided the information and the credit-reporting company. Samples of templates you can use for a credit report dispute letter can be found on the Consumer Financial Protection Board website.

Option 2 Apply For A New Credit Card

Applying for a new credit card is also a tactic that could reduce your credit utilization ratio. By adding a new line of credit, youre essentially boosting your overall credit line, which can help if youre unable to quickly pay down existing credit card debt.

Before you apply, determine the following:

  • What type of credit card you need. If you have poor or fair credit, youll want to consider a card meant to help you build a good credit history, such as a secured card. Secured cards require a deposit in the amount of your credit limit, and protect the issuer in case you default on the debt. On the other hand, if you have good credit or better, you could choose to apply for a card that earns rewards or offers an introductory APR period.
  • If you prequalify for any cards. Some issuers such as American Express, Capital One, Chase and Discover allow consumers to check if they prequalify. While prequalification doesnt guarantee youll be approved once you apply, it does indicate a better chance.
How much will this action impact your credit score?

Much like requesting a credit limit increase, the amount that getting a new card can improve your credit score depends on the credit limit youre granted on the new card. The lower it brings your utilization, the better for your score.

Consider the following examples:

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Limit Your Number Of Credit Applications Or Credit Checks

Its normal and expected that you’ll apply for credit from time to time. When lenders and others ask a credit bureau for your credit report, its recorded as an inquiry. Inquiries are also known as credit checks.

If there are too many credit checks in your credit report, lenders may think that youre:

  • urgently seeking credit
  • trying to live beyond your means

Tips To Increase Your Credit Score

What Factors Make Up Your Vantage Score?

If you are like many consumers and dont know your credit score, there are several free places you can find it. The Discover Card is one of several credit card sources that offer free credit scores. Discover provides your FICO score, the one used by 90% of businesses that do lending. Most other credit cards like Capital One and Chase give you a Vantage Score, which is similar, but not identical. Same goes for online sites like Credit Karma, Credit Sesame and Quizzle.

The Vantage Score comes from the same place that FICO gets its information the three major credit reporting bureaus, Experian, TransUnion and Equifax but it weighs elements differently and there could be a slight difference in the two scores.

Once you get your score, as Homonoff suggested, you might be surprised if its not as high as you expected. These are ways to improve the score.

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Frequently Asked Questions About Credit Scores

Does carrying a balance on your credit card help build credit?

No, this is a myth. As long as youre using your credit card responsibly and the issuer reports the account and payment activity to the credit bureaus, you can improve your credit score without rolling over a balance month to month. Plus, carrying a balance can be expensive due to the interest charges youll incur if youre not in a 0% intro APR period.

Will paying off accounts sent to collections help your credit score?

This depends on the scoring model a lender relies on when checking your score. Older models will weight collections accounts as a negative impact on your score even if youve paid off the debt. Newer models disregard paid collections accounts and put less weight on unpaid medical collections, though the latter will still have a negative impact. However, you cant guarantee that a lender will use a newer scoring model when you apply for credit, as older models are still widely in use.

What is the fastest way to increase your credit score?

One of the fastest ways is to reduce your credit utilization ratio. If you have one or more credit cards close to being maxed out, paying them off is likely to cause your credit score to go up once the issuer reports the lower balance to the bureaus.

Ask To Have Negative Entries That Are Paid Off Removed From Your Credit Report

You may have a series of late payments on your credit report, or perhaps an old collection account that’s since been paid off still shows up. If this is the case, ask to have them removed.

This step may take more time and effort on your end, but it could be worth it. Triggs suggests speaking to the collections agency, debt buyer or original creditor to remove a paid-off account from your credit report.

“You’d most likely have better results using this method with collection agencies or debt buyers versus the original creditor,” he says.

Try to convince them to not only show the account as paid, but to remove the account altogether, which could have a much bigger impact on your credit score. “Having even a paid collection account or paid charge-off on your credit report could deter creditors in issuing you future credit at all,” Triggs says.

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Open New Accounts But Sparingly

When you open a new account, your average credit age is lowered, and the additional inquiry on your credit report can also hurt your credit score. Of course, you cant completely avoid opening new accounts. Thats actually a necessary step if youre rebuilding a damaged credit score. Open accounts as you need them.

Pay Down Revolving Account Balances

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Even if you’re not behind on your bills, having a high balance on revolving credit accounts can lead to a high and hurt your scores. Revolving accounts include credit cards and lines of credit, and maintaining a low balance on them relative to their credit limits can help you improve your scores. Those with the highest credit scores tend to keep their credit utilization ratio in the low single digits.

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Pay Your Bills On Time

Failing to pay your bills in a timely manner is one of the fastest ways to ruin your credit history because 35% of your FICO credit score stems from your payment history.

Most creditors will report a late payment that is 90 or more days past due. Once reported, your credit score could lose 100 points or more.

If you find yourself simply forgetting to make some bill payments, set up automatic payments wherever possible. Consider using personal financial software to remind you of upcoming bills and/or initiate repayments automatically.

How To Improve Your Credit Score Quickly

The major contributing factor to improving my credit score in just 30 days was decreasing my ratio. I lowered my credit utilization ratio by 19%!

This took two steps.

First, I paid more than the minimum amount due on my credit cards. I do that anyway, but I bumped up the amount by about $25.

Second, I increased my available credit on one of my credit cards by accepting a credit line increase offer on my account. I would definitely suggest that you accept any credit line increase offer. Just be smart enough not to use it!

Its suggested that you request a credit line increase once every 6-12 months. Why? It helps with your credit utilization ratio, and that helps your credit score.

Your credit utilization ratio is the amount of debt you have divided by the total amount of credit youve been extended. Sign in to your credit card account online to see if a credit limit request is waiting for you, or call the number on the back of your card to find out about your options. The suggested utilization ratio is 30% or less on each individual account and all accounts combined.

Another major contributing factor is my perfect track record of on-time payments. According to Credit Karma, I have a 100% record of consistent, on-time payments. I never miss a payment by maintaining my own personal bills calendar, which tells me when all of my bills are due. I even set reminders one week early to allow room for any mistakes.

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You Have A Plan Now Its Time To Take Action

All you need is one word to sum up the process of improving your credit score:


If you find yourself with a low credit score, this could be the result of poor discipline, little-to-no credit history, or a combination of the two. The only exception being unfortunate circumstances where something outside of your control – like the loss of your job – has damaged your credit score.

In any case, it will take diligence in knowing your credit score and development of financial discipline that will bring it back, improving your attractiveness as a borrower and lowering the interest youll be asked to pay.

Keep Your Credit Card Accounts Open

5 Factors That Make Up Your Credit Score

This step may seem counter-productive when weighed up with the need to keep your balances low, but that couldnt be further from the truth. In fact, closing down your credit cards wont help to improve your credit score, and may actually harm it.

Heres the deal:

Carrying maxed-out credit cards might be bad, but having credit card accounts open with little-to-zero balances will show a reliability and safety in handling money that has been lent to you. A low balance shows youre financially responsible and pay back your debts on time.

The best part? Should something go wrong that affects your credit score, cash flow, or your ability to gain finance, having credit cards on hand for a financial emergency could prove invaluable.

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Open A New Credit Account

To some extent, you can help raise your credit score by opening a new credit account a new credit card account, a personal loan, an auto loan, an installment loan, refinancing a student loan, etc. This helps in a couple of ways, but only in small doses:

  • CUR reduction: By getting a new revolving credit card account, the CUR denominator increases. For this to have the desired effect, you should not carry a balance on the new credit card, which would offset the gain by increasing the CURs numerator .
  • Increase credit mix: Ten percent of your FICO score stems from your mix of different credit types: an auto loan, credit cards, mortgages, online loans, retail accounts, and finance company accounts. FICO reasons that you are more creditworthy if you can successfully juggle multiple account types. But dont open a new account just for FICOs sake, as this is only a minor factor.

The problem with opening new accounts is that the benefits just described are somewhat offset by the hard credit inquiries required for new credit, a 10% component of your FICO score. For a single new account, the impact is minor: A five-to-10-point drop in your credit score for up to one year.

Opening a new account is probably a net positive, but multiple new accounts in a relatively short time frame may do more harm than good.

Leave Old Accounts Open

Once you finally get rid of student debt or pay off your auto loan, you may be impatient to get any trace of it wiped from your report.

But as long as your payments were timely and complete, those debt records may actually help your credit score. The same is true for your credit card accounts.

An account thats paid in full is a good thing however, closing an account isnt something that consumers should automatically do in the hopes that it will positively impact their credit score, says Nancy Bistritz-Balkan, vice president of communications and consumer education at Equifax. Having an account with a long history and solid track record of paying bills on time, every time, are the types of responsible habits lenders and creditors look for.

Closing a credit card account can actually lower your credit score, as you will now have a lower maximum credit limit. If youre still carrying balances on other cards or loans, your utilization ratio will go up. Youre better off keeping the card with a $0 balance.

Any bad debts that can impact your score negatively are automatically removed over time. According to Ulzheimer, bankruptcies can stay on your credit report no longer than 10 years, while late payments and delinquencies such as collections, repossessions, foreclosures and settlements stay on your report for seven years.

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Option 1 Request A Credit Limit Increase

Another way to reduce your credit utilization ratio if youre carrying high balances is to bump up your credit limits.

For example, if youre carrying $700 in debt on a card with a $1,000 credit limit, your credit utilization is 70%. If youre successful in increasing your credit limit to $2,000, then your utilization rate drops to 35%.

Some issuers make it easy to request a credit limit increase via your online account. For example, Citi allows cardholders to make such a request on the Credit Card Services page:

You can also call the number on the back of your card to make the request. Know that some issuers may conduct a hard pull on your credit before granting you a higher credit line, which can ding your credit score a few points. Your score will recover, but inquire exactly how your request will be handled before you allow them to proceed so you know what to expect.

Note: If youve only had the card a few months, have a history of late payments or are carrying really high balances, your request may be denied until youre seen as a less risky customer.

How much will this action impact your credit score?

The impact a credit line increase could have on your credit score depends on much of an increase you get. If its enough to bring your utilization under 30%, you should see a reasonable increase in your score. However, it wont improve your score as much as paying off your balance and bringing your utilization to or near zero.

How Long Does It Take To Rebuild Credit

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It’s hard to say with certainty how long it takes to rebuild credit because each person’s credit history is different. If you’ve had credit difficulties in the past, how long it will take to rebound depends in part on the severity of the negative information in your credit report and how long ago it occurred. While some actions can have an almost immediate effectsuch as paying down credit card balancesothers may take months to make a significant positive impact.

If you’re disputing information in your credit report you believe is fraudulent or inaccurate, the investigation can take up to 30 days. If the credit reporting agency finds your dispute valid, the information will be removed from your credit report, and your score will reflect that change as soon as it’s calculated again.

If you’re making payments or reducing your credit card balances, don’t worry if your credit report isn’t updated right away. Creditors only report to Experian and other credit reporting agencies on a periodic basis, usually monthly. It can take up to 30 days or more for your account statuses to be updated, depending on when in the month your creditor or lender reports their updates.

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