6 Secrets that Helped Me in Raising My Credit Score
Raising my credit score was one of my first goals when I started focusing on my finances. Here’s exactly how I took my credit from 515 to over 800, and how you can do it too!
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When I first started looking into fixing my finances, raising my credit score was one of my first priorities.
Why?
A low credit score can impact every other aspect of a person’s financial life.
It can dictate everything, from where we live, to what we can buy, so I felt it was extremely important to get a handle on my credit score and bring it up ASAP.
Read on to find out exactly what helped in raising my credit score and how you can implement the same steps to improve your credit score fast!
How the Right Guidance Helped in Raising my Credit Score
When you don’t know a lot about a particular subject, it’s easy to feel lost and hopeless, and like you don’t know where to start.
I used to feel that way, so the first thing I did was to educate myself.
I started researching and learning everything I could about how credit scores worked, how they were calculated and what I could do to improve mine quickly.
Recommendations:
Thankfully, since I’ve done all the research and legwork, you can read all about it in the Credit Repair section of this blog!
I Recommend that you check the blog often so you can keep up to date with the latest information.
I Got Real With Myself
Once I had a good understanding of all things credit score, I decided to take the easiest, and scariest step:
I checked my credit score.
Many times, it’s easier to sweep issues under the rug than to face them head on.
This is why this was one of the scariest things for me to do.
I was afraid of what I would find, but if you’re gonna improve something, you need to know what the starting point is.
So what did I find?
I found that my credit score was a whopping 515 and that I had a ton of accounts in collections. I guess I should have been scared after all.
Recommendations:
Checking your credit score can take just a couple of minutes, but deciding to check it can take a while.
Today, work on getting over your fear of what you’ll find, and pull your credit report and score:
You can get all three scores from the different credit bureaus by visiting myFICO.com, which is the consumer division of the company that invented the FICO score.
To get all three credit reports and scores at once, visit myFICO here.
You also have the option to go directly to each credit bureau and pull each credit score separately from Experian, Equifax, and TransUnion.
I don’t recommend this option though as it will be more expensive and time consuming than using the other two services above.
I Checked My Credit Report Carefully
Finding errors on your credit report is pretty common, and unfortunately, those errors can be very costly.
This is why it’s important to check your credit report regularly and address any mistakes sooner rather than later.
Recommendations:
Check your credit score regularly and be on the lookout for mistakes such as:
- Incorrect names or addresses
- Incorrect account statuses
- Inquiries that are older than two years
- Collections accounts older than seven years
- Bankruptcies older than 10 years
All these are common errors that could be lowering down your score.
I recommend that you address erroneous information first.
This is fairly easy to remove from your credit report and could represent an almost immediate increase to your score.
Related Posts:
5 Quick Ideas to Get Some Side Cash Today
The Beginner’s Guide to How Credit Scores Work
6 Common Mistakes That Are Killing Your Credit Score
I Tackled Maxed Out Accounts
Your credit score is made up of various components.
One of which is your credit utilization, and it accounts for 35% of your overall score!
This means that if your total available credit is $1,000 and your balance on that account is $900, then your utilization is 90%.
Given the high impact this has on the overall score, I began making extra payments each month to the cards I had maxed out.
Recommendations:
Focus on the cards that carry the highest balance in relation to their available balance first.
In my case, this helped me tremendously, raising my credit score in a matter of just a couple of months.
How are you gonna do this, you ask?
Get committed to “finding extra money”. If you can pick up extra shifts at work, do it.
Another option is to get a side gig for a while until you can bring down your account balances. Here’s some ideas:
- Get a babysitting, pet sitting or house sitting gig with your friends or neghbors
- Offer your services on Fiverr
- If you have a large family, buy groceries in bulk
- If you don’t, save money on groceries using Coupon Surfer
- Drive for Uber or Lyft on the weekends
- Sell items you no longer use on apps like OfferUp or LetGo
- Cut the cable and switch to an online service like Hulu
Do whatever you can to increase your income and reduce your expenses.
Then, allocate any extra money you get to bringing down your credit card balances first, then student and car loans, if you have any.
I Addressed Past Due Payments
Payment history is another biggie when it comes to calculating your credit score, and it’s important to address this early on.
I first started by bringing up to date the accounts that were the most past due, say 90 days.
Then, I worked my way up to the accounts that were only a month past due.
However, if there was an account that I knew would be easy to work with to get on a payment plan or some other type of arrangement, then I prioritized those so I could have some easy wins.
Recommendations:
Work with your creditors.
I know, I know, it’s just easier to ignore those phone calls and letters, but by taking a proactive approach, you can get back in control of those accounts.
Negotiate the terms of your payments to them as much as you can.
Remember that it never hurts to ask.
The worst that can happen is that they say no.
I Focused on Accounts in Collections
Lastly, I focused on the accounts that had already been sent to collections.
To do this, I first saved up the amount that I thought I could settle each account for.
Then, I contacted the collections agency and made them an offer to settle the account for a lower amount than what I originally owed.
I also asked them to remove the collection remark in exchange for my payment.
This is what is normally called “pay for delete”.
It doesn’t always work, but if you’re polite enough and show a good faith effort to work with the agency, you can have a pretty good chance that the account may be removed from your credit report altogether.
Recommendations:
I’d like to reiterate that it never hurts to ask. Don’t be afraid to call and ask for a settlement.
However, be careful when it comes to an older account.
Depending on where you live, offering to make a payment on an older account that’s close to falling off your credit history may “restart the clock”, allowing it to remain on your credit for another 7 years.
Be sure to check the rules specific to your state before sending a payment.
To learn more about how to negotiate with your creditors, you can check out this article.
In it, I’ve covered how I was able to negotiate away half of my debt just by (persistently) asking.
That’s it!
Following these steps helped me in raising my credit score by over 200 points in less than a year. Then eventually I worked it up to 800 points.
If you’d like a more in-depth discussion on how you can increase your credit quickly, you can get my free Quick Start Guide to Improving Your Credit Score here!
Dealing with a low credit score can be very challenging.
It can take a lot of patience, so I’d like to encourage you to not give up, even if you don’t see a lot of progress right away.
Remember that it may take up to a couple of cycles for any changes to be reflected. Be patient and keep working on it!
As you follow the recommendations outlined above, you’ll be able to increase your credit score to where you’d like it to be!
Do you have a credit repair success story? I’d like to hear all about it!
