10 Ways to Raise Your Credit Score Fast

Photo (cc) by Tyler J. Bolken

When I was in my early 20s, I was not what you’d call an informed consumer. Not by a long shot. I remember thinking, when I felt far too busy to worry about paying a bill on time, “It won’t matter. It’s not like they’re not going to get their money.”

What I didn’t understand is that payment history, including late or skipped payments, makes up 35 percent of your FICO credit scores.

Why is this important? Your score determines the interest rates you pay on loans. A low score could easily cost you an extra $50,000 in mortgage payments. Credit scores also affect insurance premiums. Landlords look at them when deciding whether to rent you an apartment. Employers may check your FICO score when you apply for a job.

I’ve wised up since then to what a powerful role credit scores play as a gatekeeper to opportunity in our lives.

Polish your score

There are several types of credit scores, but we’re talking here about your FICO scores, the ones used most widely. FICO scores range from 300 (the basement) to 850 (stellar). You can do plenty to improve your scores. In this video, Money Talks News founder Stacy Johnson tells how to get the fastest results for your efforts. After that, read on for more ways to boost your numbers.

1. Order your credit reports

Begin raising your credit scores by checking your credit history. Records on your use of credit are kept by three major credit bureaus — Equifax, TransUnion and Experian. The reports can differ a bit, so it’s a good idea to get all three, especially since each company is required by law to give you one free report annually.

Here’s the lowdown on how to access credit reports. In brief, go to AnnualCreditReport.com and click “Request your free credit reports” (a red button) at the bottom of the page. Here’s what you’ll need to give: name, address, birth date and Social Security number, driver’s license number and phone number.

2. Correct errors

Your credit score from each bureau is based on the information in your report, so comb them for mistakes. Pay special attention to any incorrectly reported late payments. Also, check that the balance owed on each open account is correct.

Personal finance expert Liz Weston says don’t worry about misspellings of your name, whether a closed account is listed as open, the use of old or wrong addresses, or an old employer who’s listed as current. Focus on these important errors instead, Weston says:

  • Late payments, charge-offs, collections or other negative items that aren’t yours.

  • Credit limits reported as lower than they actually are.

  • Accounts listed as “settled,” “paid derogatory,” “paid charge-off” or anything other than “current” or “paid as agreed” if you paid on time and in full.

  • Accounts that are still listed as unpaid that were included in a bankruptcy.

  • Negative items older than seven years (10 in the case of bankruptcy) that should have automatically fallen off your reports.

There are two ways to dispute and correct mistakes: through the merchant or lender who made the error or through the credit reporting agency whose report contains the error. The Federal Trade Commission explains in detail how to dispute errors and offers this sample letter.

3. Negotiate to erase negatives

Also go after the negatives on your reports that reflect for-real problems, not errors.

You can’t dispute these, but you can ask creditors to erase a charge-off (an uncollected debt) or an account that went to collection. Before paying off the balances on these accounts, try negotiating. Write a letter to the creditor offering to pay the balance in full if they’ll call the account “paid as agreed” on your report, or remove it entirely. Tip: Get the agreement in writing before you pay off the balance.

Here’s a sample letter to use when asking creditors to make a “pay to delete” agreement with you and another for requesting a “good-will adjustment,” where you ask a creditor to remove the record of one or two late payments.

Most negatives, if accurate, can’t be erased. The further they recede in time, though, the less impact they’ll have on your scores. Eventually, they’ll drop off your record. But bankruptcy, foreclosure and delinquent accounts stay on your credit history for seven to 10 years.

4. Know the score

To know how much you’ve raised your FICO score, you’ll need to know what the score is now. The free credit reports you’ve ordered won’t include it. To get your FICO scores, you’ll usually need to pay — up to $19.95. Even then, the score you get won’t necessarily be the one lenders see.

Money Talks News founder Stacy Johnson says that’s outrageous. But so far, efforts to make FICO scores more widely available at no cost haven’t succeeded.

If you do buy your FICO score, don’t pay for additional services, like credit monitoring. You can do that yourself by regularly checking your credit reports.

5. Pay off debt

The more unused available credit you have, the shinier your FICO score is. About 30 percent of your score is determined by the percentage of your credit limits you are using. (All components of a FICO score are listed in this article.)

This is your credit utilization ratio. Example: If your Visa card has a credit limit of $2,000 and your balance is $1,500, you’re using 75 percent of your available credit – way too much. Use no more than 30 percent and preferably less of your available credit.

For a quick boost to your scores, pay off a card or two with low balances. Then work on blitzing the rest of your debts.

6. Raise your credit limits

Pump up your credit utilization ratio by asking your creditors to raise your limit on their accounts.

This strategy isn’t for everyone: Don’t raise your credit limits if the increased credit will tempt you to charge more.

7. Get a credit card

If you don’t already have a credit card, get one or two and then manage them responsibly — paying bills on time and not letting balances accumulate.

If you don’t qualify for a standard credit card, you can build credit with a secured card. Be sure to find a secured card that reports your payment record to all three credit bureaus.

8. Don’t cancel cards

You don’t want to cancel any credit cards because that would cause your available credit to decline. In order to keep cards active and not closed by the issuer for inactivity, put a recurring charge on them, like your Netflix subscription, and then pay them off in full each month so balances do not accumulate.

9. Add variety

You may be able to raise your scores a small amount by adding a different type of credit to your mix. For instance, buy an appliance or piece of furniture on installment, being careful to avoid even one late payment.

“Applying for and getting an installment loan can help your scores if you don’t have any installment accounts or you’re trying to recover from a credit disaster such as bankruptcy,” Weston wrote.

Another possibility is a small personal loan. A credit union is a good place to borrow as they typically offer lower interest rates.

10. Never be late again

If late or skipped payments have lowered your FICO scores, one of the most powerful things you can do to cure your scores is to make every payment on time. Your payment history is the single biggest piece of your FICO scores.

The no-fail cure to late payments is to automate them, as long as you keep sufficient funds in your bank account. (See: “8 Shortcuts to Getting Richer.”)

We’d love to hear your tips for boosting credit scores. Tell us what’s worked for you in the comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
10 Bad Money Habits That Are Robbing You Blind
10 Bad Money Habits That Are Robbing You Blind

Here’s how to change those bad behaviors.

Retiree Households Lose $111,000 to This Social Security Misstep
Retiree Households Lose $111,000 to This Social Security Misstep

A study finds 96% of retirees make this mistake when claiming Social Security benefits.

The Annuity Everyone Needs — and Anybody Can Get
The Annuity Everyone Needs — and Anybody Can Get

This simple strategy can put more money in your pocket during retirement.

13 Affordable Products for a Better Night’s Rest
13 Affordable Products for a Better Night’s Rest

These Amazon products can help you finally catch 40 winks — or more.

9 Items Under $25 That Will Keep Your House Clean
9 Items Under $25 That Will Keep Your House Clean

We’ve rounded up some of the best products for cleaning your bathroom, kitchen and every other room.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
10 Things Frugal People Never Buy
10 Things Frugal People Never Buy

If you’re a true tightwad, the mere thought of spending money on these items gives you the willies.

10 Useless Purchases You Need to Stop Making
10 Useless Purchases You Need to Stop Making

You might as well flush your money down the loo if you spend it on these things.

7 Social Security Benefits You May Be Overlooking
7 Social Security Benefits You May Be Overlooking

There’s more to Social Security than retirement benefits.

10 Cars You Are Most Likely to Keep for 15 Years
10 Cars You Are Most Likely to Keep for 15 Years

The cars that owners hold onto the longest have one thing in common, a new study shows.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

14 Things You Should Stop Buying in 2021
14 Things You Should Stop Buying in 2021

These convenient household products come with hidden costs that you might not have considered.

The 6 Best Investing Apps for Beginners
The 6 Best Investing Apps for Beginners

If you’re looking to ease into investing in the coronavirus economy with just a little money, check out these easy-to-use tools.

7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

8 Things You Should Replace to Improve Your Life Today
8 Things You Should Replace to Improve Your Life Today

Being frugal isn’t smart if you put off replacing these items.

9 Things You Should Never Leave in a Car
9 Things You Should Never Leave in a Car

Thinking of leaving these possessions in a car? Prepare for unexpected consequences.

7 Income Tax Breaks That Retirees Often Overlook
7 Income Tax Breaks That Retirees Often Overlook

Did you realize all these tax credits and deductions exist — or that they apply to retirees?

9 Mistakes People Make When Cleaning With Vinegar
9 Mistakes People Make When Cleaning With Vinegar

Cleaning with vinegar can save you a lot of money, but using it like this can cost you.

13 Amazon Purchases We Are Loving Right Now
13 Amazon Purchases We Are Loving Right Now

These practical products make everyday life a little easier.

10 Things Successful Retirees Do Differently
10 Things Successful Retirees Do Differently

These habits and characteristics can help put you on the track to success.

7 Costly Health Problems That Strike After Age 50
7 Costly Health Problems That Strike After Age 50

As we age, our bodies wear down. Here is how to cut costs associated with some common ailments.

Will You Owe Taxes on Last Year’s Stimulus Payments?
Will You Owe Taxes on Last Year’s Stimulus Payments?

It’s the question on everyone’s lips this tax season.

29 Purchases That Can Save You Money Every Day
29 Purchases That Can Save You Money Every Day

Sometimes, you’ve got to spend to save.

7 Things I Never Buy at Costco
7 Things I Never Buy at Costco

A bulk buy isn’t always the best buy.

5 Tax Mistakes to Avoid in Retirement
5 Tax Mistakes to Avoid in Retirement

Even great savers can reduce their retirement income by making these mistakes.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.