How to Raise Your Credit Score by 100 Points Overnight

Here are 10 ways to increase your credit score by 100 points – most often this can be done within 45 days

  1. 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.
  2. 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.
  3. Pay off any collections. Paying off a collection will increase your score, but be aware that the record of a debt having gone into collection will stay on your credit report for seven years.
  4. 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 a 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.
  5. 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.
  6. 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, make sure you 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.
  7. 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.
  8. Shop for new credit over a short time 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 to determine the rate they will charge. Too many inquiries over time can negatively impact your score, but if you cluster these applications within a few days or a week, the FICO scoring system will recognize that you are comparing rates for a single new loan or credit card rather than attempting to open multiple new lines of credit.
  9. 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.
  10. Apply for new credit sparingly. Only apply for new credit when you actually need it and not simply to boost your available credit. Opening several new credit accounts in a short time frame can lower your score.

The bottom line about building credit fast

When you’re working to fix your credit, it takes good behavior over time. However, lowering your utilization rate by paying down existing debt, getting a new credit card or requesting a credit line increase on an existing card can provide the quickest credit score boost.

Any late payments and debts sent to collection should be handled promptly — otherwise, they’ll just cause more pain once they hit your credit reports. It’s also wise to review your credit reports on a regular basis. in order to spot errors that might be dragging down your credit score.

Knowing what actions to take that can help improve your credit score and being a responsible borrower can boost your chances of increasing your credit score by 100 points or even more.

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3. Get a Secured Credit Card

If you have bad credit, one of the best ways to raise your score is to get a secured credit card. This type of card requires you to put down a deposit that serves as collateral, but it can help you rebuild your credit by reporting your positive payment history to the credit bureaus.

Just make sure to use your card responsibly by only charging what you can afford to pay off in full each month, and try to keep your balance below 30% of your credit limit.  Otherwise, you could end up doing more harm than good.

There are a few different secured cards to choose from, so compare your options and find one that best suits your needs.

A former intern of mine, Kevin, was able to increase his credit score 100 points using a secured credit card. Here’s his story:

Kevin’s 100-Point Credit Score Increase Story (IRL Example)

As a junior and senior in college, I was always told that applying for a credit card could be my first step in the wrong direction.

With a credit card in hand, my parents worried I would spend money I couldn’t pay off and build a lifestyle I couldn’t really afford, rather than learning to save money.

While these are legitimate concerns, I had to let them know I felt as if I had some control over my spending. My response was always the same:

“How would I know owning a credit card would hurt me financially until I was able to try for myself?”

What I Learned from Being Denied Credit Cards

When I was finally prepared to get a credit card on my own, none of the banks I applied to would give me a chance.

It went like this:

“I am unemployed, have no credit history, and have a couple of thousand dollars in college debt that I will have to start paying on in the next year or two.”

Not exactly a winning pitch to convince someone to give you a line of credit! Two banks denied me, but one banker was kind and shared some info that has helped me raise my credit score over 100 points in the past five months.

First, I should stop trying to apply for credit cards that would get denied. His reasoning was simple: when you apply, they do a hard credit check which, in turn, can lower your credit score even more.

His second piece of advice was to get a secured credit card.

How a Secured Credit Card Works

He told me that no major bank was going to accept my credit application, but there was actually an alternative option available – one which was especially perfect for those in my exact situation: to sign up for what is called a secured credit card.

While the terms for these are horribly one-sided in favor of the lender, I assure you it is a small price to pay for the result you receive after only a few months.

With secured credit cards, you give the lender a cash deposit upfront, and that cash deposit is typically equal to your credit limit.

This process truly confused me at first, since I thought the deposit was money I could actually spend. What I learned, however, is that the deposit is there in case I default.

I couldn’t spend the deposit itself, but I would get it back if I kept my account in good standing until I closed the card.

After you make your deposit, secured cards are also treated just like traditional credit cards. Your secured card will typically look and act just like a regular credit card, so no one will know it is secured.

There is also an annual fee associated with most secured credit cards, but I felt it was a small price to pay for the opportunity to build some credit history.

How To Maximize the Benefits of Your Secured Credit Card

When I first checked my credit score with MyFICO in March of 2011, it was sitting at 621.

I set up my new secured credit card with a credit limit of $1,100. The credit limit should be a function of what cash you have, and also what you plan on using the credit card for.

According to many bankers and friends I talked to, you should try to run a 75% utilization rate on your credit card to maximize your potential to raise your credit score.

So, if you only spend around $300 a month, you should give your secured credit card a $500 down payment so that you are utilizing your credit rather than having a $1,000 dollar limit and only spending $300.

My expenditures were approximately $700 dollars a month so the $1,100 dollar limit fit my needs.

Why You Should Let Your Kids Get a Secured Credit Card

To all of the parents out there who worry about letting their college kid apply for a credit card, I can tell you it worked for me in five months and will change my financial future for many years to come.

Secured credit cards offer a foolproof way to raise your credit score when it is not possible through a regular bank credit card.

It’s a safe way to earn credit if you do not trust your kid to spend responsibly.

The worst that can happen with a secured card is that you cannot pay your bill, your company closes out the account, and they pay off your credit with the money you already have on deposit.

My secured card worked perfectly for me and I have now been accepted for a credit card with a major bank.

How I Raised My Credit Score Over 100 Points

Raising my credit score with a secured card took some disciplined, conscientious spending.

Here are the rules I followed to maximize the benefits of my secured credit card.

  • Spend what you have: After I received my secured card and started spending, I made sure that I would only spend money I already had or would receive, before the next pay period.
  • Pay often: I ended up paying off my credit card roughly four times a month to ensure I never carried a balance from one month to the next.
  • Know your limits: I would never let my credit limit exceed $800, and I would never pay it off if the card balance was under $300 unless the pay period was coming to an end.
  • Make purchases: I would put every penny of my spending on the credit card – from the smallest expenses such as a drink from the gas station to major purchases such as airline tickets or hotel rooms.
  • Be consistent: I repeated this process for 5 months to establish a credit history of regular use and always pay on time.

What My Improved Credit Score Allowed Me To Do

In August of 2011, I had to purchase a car so I could switch jobs.

When I filled out the credit application to see if I qualified for lower financing rates, my credit score came back as 731.

In other words, I raised my credit score from 621 to 731 in just five months!

This is a very big deal because, at 621, I would have been denied a loan for the car, or would have had an interest rate that exceeded 9% on the auto loan.

Since I chose to get a secured credit card, I was able to take the car loan on my own and qualify for the low rate of 3.99% financing.

The difference in the loan between the two interest rates would be $750 over the life of the loan, far surpassing the card’s annual fee, and the opportunity cost of my secured credit card holding my $1,100 for five months.

How long do derogatory marks stay on your credit report?

Your score is determined by the three credit bureaus (Equifax, Experian and TransUnion), but it’s up to your lenders to contact them to report information about you. It can be as simple as your credit card company reporting that you made a monthly payment on time, increased your debt or decreased your balances. These are all positive influences on your score, but there may be a slight lag in timing due to the reporting process.

In addition to a potential delay in the telephone game between your credit issuer and the credit bureaus, certain financial events can linger on your credit history for years. Unfortunately, the more harmful events are often the ones that stick around the longest, so it’s best to know what actions will be the biggest burdens:

Event Average time on credit report
Late payments 7 years
Foreclosures 7 years
Debt collections Up to 7 years
Chapter 13 bankruptcy 7 years
Chapter 7 bankruptcy 10 years

This may seem ominous, but here’s the good news: recency bias is alive and well in the credit scoring world. Even if they’re still present, the old items that appear on your report have less weight than your newer ones.

5. Make the Most of a Thin Credit File

Having a thin credit file means that you don’t have enough credit history on your report to generate a credit score. An estimated 62 million Americans have this problem. Fortunately, there are ways to fatten up a thin credit file and earn a good credit score.

One is Experian Boost. This relatively new program collects financial data that isn’t normally in your credit report, such as your banking history and utility payments, and includes that in calculating your Experian FICO Score. It’s free to use and designed for people with limited or no credit who have a positive history of paying their other bills on time.

UltraFICO is similar. This free program uses your banking history to help build a FICO Score. Things that can help include having a savings cushion, maintaining a bank account over time, paying your bills through your bank account on time, and avoiding overdrafts.

A third option applies to renters. If you pay rent monthly, several services allow you to get credit for those on-time payments. For example, Rental Kharma and RentTrack will report your rent payments to the credit bureaus on your behalf, which in turn could help your score. Note that reporting rent payments may only affect your VantageScore credit scores, not your FICO Score. Some rent-reporting companies charge a fee for this service, so read the details to know what you’re getting and possibly purchasing.

A new entry into this field is Altro (formerly Perch), a mobile app that reports rent payments to the credit bureaus free of charge.

Does paying off a loan help or hurt credit?

Paying off a loan frequently hurts credit because it impacts your credit history and your credit mix. If the loan that you have paid off is your oldest credit line, then the average age of your credit will become newer and your score will drop. If the loan that you pay off is your only loan, then your credit mix suffers.

Add utility and phone payments to your credit report

Typically, payments such as utility and cellphone bills won’t be reported to the credit bureaus, unless you default on them. However, Experian offers a free online tool called Experian Boost, aimed at helping those with low credit scores or thin credit files build credit history. With it, you may be able to get credit for paying your utilities and phone bill — even your Netflix subscription — on time.

Note that using Experian Boost will improve your credit score generated from Experian data. However, if a lender is looking at your score generated from Equifax or TransUnion data, the additional sources of payment history won’t be taken into account.

There are also services that allow rent payments to be reported to one or more of the credit bureaus, but they may charge a fee. For example, RentReporters feeds your rental history to TransUnion and Equifax; however, there’s a $94.95 setup fee and a $9.95 monthly fee.

How much will this action impact your credit score?

The average consumer saw their FICO Score 8 increase by 12 points using Experian Boost, according to Experian.

When it comes to getting your rent reported, some RentReporters customers have seen their credit scores improve by 35 to 50 points in as few as 10 days, according to the company.

6. Work with a Credit Repair Agency

If you’re not able to raise your credit score on your own, you may want to consider working with a credit repair agency like Credit Saint or Lexington Law.  These companies can help you dispute errors on your credit report, negotiate with creditors to remove negative items and develop a plan to improve your credit.

Just be sure to do your research before choosing a credit repair agency.  There are a lot of scams out there, so you want to make sure you’re working with a reputable company.  You can check out the Better Business Bureau website to see if there have been any complaints filed against the company.

3. Pay Twice a Month

Let’s say you’ve had a rough couple of months financially. Maybe you needed to rebuild your deck (raising my hand) or had to get a new fridge. If you put big items on a credit card to get the rewards, it can temporarily throw your utilization ratio (and your credit score) out of whack.

You know that call you made to find out the closing date? Make a payment two weeks before the closing date and then make another payment just before the closing date. This, of course, assumes you have the money to pay off your big expense by the end of the month.

Take care not to use a credit card for a big bill if you plan to carry a balance. The compound interest will create an ugly pile of debt pretty quickly. Credit cards should never be used for long-term loans unless you have a card with a zero percent introductory APR on purchases. Even then, you have to be mindful of the balance on the card and make sure you can pay the bill off before the intro period ends.

5. Apply for a Credit-builder Loan

A credit builder loan is geared toward borrowers with no credit history who don’t want to open a credit card.

To use a credit builder loan, you first decide on the amount and term. Instead of receiving the money upfront, every month you make a payment to the lender, and they report it to the credit bureaus. When the term is completed, you receive back the amount you paid, minus possible fees.

If you made payments on time, you should have improved your payment history and therefore boosted your score.

3. Become an Authorized User

An authorized user is someone who is added to an existing credit card account. Authorized users can use the card but will not be responsible for any payments. When you become an authorized user, the card’s history will appear on your credit report. If the main cardholder has made on-time payments, then your credit score may receive a boost.

How can you fix your credit yourself over time?

The tips above might help you boost your credit score over a few months, but how long it takes to improve your credit score depends on where it lies on that 300-850 range. Here are some tips to get you into the "good" to "exceptional" range over the longer term:

Paying your bills on time

A sure-fire way of paying bills on time is by setting recurring payments on "auto pay" in your online banking account. Credit card companies, loan providers, and utilities can usually offer you automatic payment options that will deduct the amount due automatically from your checking account.

Reducing the amount of debt you owe

One good step is to start a debt reduction plan to clear up your finances—and set you on the path to a better score. Start by paying off your high interest rate cards: put all your effort into paying off a higher rate card, while maintaining payments on all other cards on auto pay. Once you’ve paid off the balance, don’t cancel your card! Keep it open, even if you don’t use it, so you can boost your credit utilization.

Start a new credit history

One strategy some people use to improve their payment history is to take out a credit card that is easier to qualify for, like a gas station or store card, and consistently pay off the balance each month. The good behavior can slowly put you in a better financial position. But be careful this strategy doesn’t backfire on you: you don’t want to take out new cards if you think you will be tempted to rack up more debt.

Don’t take out too many cards

Sometimes it seems like a good move to open a new credit card with a merchant to get a discount on an item. But try not to go overboard and take advantage of many discount offers over a short period of time. Each new card comes with a "hard inquiry" on your credit report by the merchant, which can have a negative impact on your credit score.

Don’t close your cards

Once you’ve paid off a card, it can be really satisfying to cut it up! But don’t close your account. Keeping your credit card account open but unused helps give you a long, established credit history, and can improve your overall credit utilization ratio. (You can always put it in a drawer if you don’t want to use it). Although sticking the credit card in a drawer has it benefits (including maintaining a favorable credit utilization ratio and low balance) you may also be able to request a credit card freeze. You may be familiar with a credit card freeze since it used whenever you report your credit card lost or stolen. In this case, you may use a credit card freeze if you want the card open in your name but don’t want or need to use the credit card for purchases.

Diversify your credit mix

Many credit-scoring models like to see you using a diversified mix of credit, so it might make sense to consider taking out a personal loan, rather than relying on credit cards alone.

Check Your Credit Score for Free

Knowing where you stand and watching your progress can be important. With Experian, you can check your FICO® Score for free. Your account gives you a breakdown of which factors are impacting your score the most, so you can take a focused approach to improving your score. Your credit score will also automatically be tracked and updated each month.

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