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Credit scores are literally math and algorithms.

PART 2.

Here are ten ways to increase your credit score by 100 points

Check your credit report. Get a free credit report from each of the three credit reporting agencies (Equifax, Experian, and TransUnion) once a year at annualcreditreport.com. Look for errors that lower your credit score and take action to correct them. Review the negative factors in the report and work on improving them, such as paying bills on time or reducing debt. Pay your bills on time. Set up automatic payments using your bank's bill pay service or sign up for e-mail alerts from your credit card company if you sometimes have trouble paying bills before the due date. Pay off any collections. Paying off a collection will increase your score, but be aware that the record of a debt that has gone into the collection will stay on your credit report for seven years. Get caught up on past-due bills. If you missed a payment, get current as soon as you can. A missing payment can lower your score by as much as 100 points. It may take some time for this black mark to fade from your credit report, but take heart: your credit score usually depends more on your most recent activity than on past credit problems. Keep balances low on your credit cards. A common rule of thumb is to keep the balance at or below 10 percent on each line of credit to improve your credit score. A balance close to or over the limit will significantly reduce your credit score. Pay off debt rather than continually transferring it. While a balance transfer to pay zero interest or a lower interest rate on your debt can be worthwhile, pay down the balance before increasing your debt load. FICO says paying down your overall debt is one of the most effective ways to boost your score. Don't close paid-off accounts. Closing unused credit card accounts reduces your available credit and can lower your credit score. Keeping them open and unused shows you can manage credit wisely. And think twice before closing older credit card accounts because a long credit history improves your score. Shop for new credit over a short period. If you are shopping for a mortgage, a car loan, or a credit card, lenders typically pull your credit report to see if you qualify and determine the rate they will charge. Too many inquiries over time can negatively impact your score.

However, suppose you cluster these applications within a few days or a week. In that case, the FICO scoring system will recognize that you are comparing rates for a new loan or credit card rather than attempting to open multiple new lines of credit. Have a mix of credit types. FICO prefers to see consumers with both installment loans and credit cards. If you are repaying student loans or have a car loan or a mortgage, then having one or two credit cards is also a good idea. While having too many credit cards can be a negative factor, you should have at least one to prove you can handle credit appropriately. Apply for new credit sparingly. Only apply for new credit when you need it and not simply to boost your available credit. Opening several new credit accounts in a short time frame can lower your score. Getting a secured credit card is one quick way to boost your credit score. A secured credit card is a type of credit card that is backed by a cash deposit that you make upfront. The deposit usually equals the credit limit on the card, which helps minimize the lender's risk. Using a secured credit card responsibly and paying off your balance on time can show lenders that you are a low-risk borrower and boost your credit score.

It's important to note that credit scoring websites are not always accurate and should not be relied upon solely for making financial decisions. These websites often use their scoring models, which can differ from most lenders' FICO scoring models. Additionally, these websites may not have the most up-to-date information on your credit report, so it's always a good idea to check your credit report directly from the credit reporting agencies.


In summary, understanding how credit scores are calculated and knowing the tips and tricks to improve your credit score can significantly affect your financial well-being. By following these steps and making responsible financial decisions, you can take control of your credit and achieve your financial goals. Remember that the fastest way to boost your score by 50 plus points in 3 months is to pay your bills on time, every time. This may seem obvious, but it is the most effective way to improve your score quickly. If you have any outstanding debts, focus on paying those off first before applying for any new credit. Another helpful tip is to keep your credit utilization low by keeping your balances low. You should keep your credit utilization under 30% and even lower if possible. If you are having trouble keeping your balances low, consider making multiple payments throughout the month to help keep your utilization in check.


Understanding the credit bureaus and how each calculates your score can also help you improve your credit. There are three major credit reporting agencies in the United States: Equifax, Experian, and TransUnion. Each bureau may have slightly different information on your credit report, which can impact your score. It is important to regularly check your credit report from each bureau to ensure there are no errors or inaccuracies. You should also focus on paying off any collections or past-due accounts immediately. While medical collections may be overlooked for some mortgage loan types, it's important to note that they can still negatively impact your credit score. Paying them off can help improve your score and show lenders you are responsible for your finances.

When it comes to applying for credit, it's important to only apply for what you need and to be selective in your applications. Applying for too many loans or credit cards can lower your score, signaling to lenders that you may be financially unstable. It's also important to keep your credit cards active and to use them responsibly, paying off the balance in full each month if possible. This helps build your credit history and shows lenders that you are a responsible borrower.

Finally, it's important to monitor your credit score regularly and to be aware of any changes or discrepancies on your credit report. You are entitled to one free credit report per year from each of the three major credit reporting agencies, so take advantage of this to stay on top of your credit. Following these tips and being mindful of your financial decisions can improve your credit score and achieve your financial goals. In addition to these tips, securing credit cards can help boost your score quickly. Secured credit cards require a security deposit, which is your credit limit. Using a secured card responsibly and making on-time payments can improve your credit score and potentially be eligible for an unsecured credit card.

Remember that improving your credit score takes time and patience, but it is ultimately worth it. A good credit score can help you qualify for better interest rates on loans, credit cards, and insurance premiums. You can take control of your financial future by understanding how credit scores are calculated and taking steps to improve your score.

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