Looking to raise your FICO credit score by 50 to 100 points? Here are a few techniques that I've used this year to hit an 800 credit score.
Here's why this method works to increase your credit score. Payment History makes up 35% of your credit score & Credit Utilization Ratio makes up 30% & Credit Mix makes up 10% plus length of time counts as 15% of your score. That's 90% of your score that we will tackle below. Let's get started.
Step 1: Order a Copy of Your Credit Report
You can order a free credit report, but did you know that it's a very basic report. It includes your credit “score”, but there are ten different FICO scores.
My friend just bought a new car (after improving her credit score), but she didn't get the lower interest payment because they said her “AUTO SCORE” was not the same as her “MORTGAGE SCORE”. Multiple Scores? What?
What are the Different FICO Scores?
There are several types of FICO Credit Scores.
- Auto FICO Score
- Mortgage FICO Score
- Bank Card FICO Score
- Personal Finance FICO Score
- Installment Loan FICO Score
- XD FICO Score
- Collection FICO Score
- NextGen FICO Score
You can get a copy of all of your scores along with our lenders see you with MyFico. (and with this month's special – you can get the report for $4.95).
Step 2: Add Rent & Monthly Items Not on Your Report
Now that you have your credit report & your credit scores. What's a good credit score? What's a bad score?
- 720+ = Excellent Credit
- 680-719 = Good Credit
- 620-679 = Fair Credit
- 580-619 = Poor Credit
- 579 and Lower = Bad Credit
Did you know that your rent is NOT included in your credit score because most landlords don't report it to the agencies? Now, you can increase your score by using a service called Rent Reporters. They report your rent payments to Equifax and TransUnion. And the average increase is 35 to 55 points in less than 2 weeks. Click Here to See How it Works
And since they add 24 months of rent history, you add length of time & a credit mix which makes up 35% and 10% respectively. Also, what companies will report rent? Check out these five companies who report rent to boost your credit score.
Step 3: Calculate Your Debt Utilization Ratio
Now, 35% of your score is based on your Debt Utilization ratio. This ratio is simply your balance divided by your available credit. If your balance is $100 and your available credit is $400, your ratio would be 25%.
Now, you want this ratio as small as possible (and your score will increase when it goes above 30%). When you pulled a credit report in Step 1, your debt utilization ratio is listed on the summary page.
There are two ways to lower this score.
- Pay off the balance (or pay down the balance)
- Increase the credit limit
Which one can you do right now? Can you pay off the balance or pay down the balance? Or can you call your credit card company to increase your line of credit?
Step 4: Dispute Negative Information or Inaccurate Information
When I first pulled my credit report, I noticed a ton of bizarre information that was added throughout the years. First, they had put all my work addresses as my “physical location”. Second, they had duplicate credit cards that doubled my credit card balances, which increased my ratio from step 3. Third, they never showed my student loans paid off (after I consolidated them into one payment), which also increased my ratio from step 3.
You can call to correct a few of the errors. Here are the phone numbers for TransUnion, Experian and Equifax:
- TransUnion: 800-916-8800 – 8am-11pm EST
- Experian: (714) 830-7000 – 9am-5pm EST
- Equifax: (800) 846-5279 – 8am-5pm EST
I made sure to pull a credit report every 90 days and created a dispute letter template to send them every 90 days until the information was removed or accurate. They still have an old work address listed as my residential, but everything else is 99% accurate.
How to Get Late Payments Removed
I am now psycho about having a clean credit record while paying everything on time. The last time I moved from apartment to a house, one of my credit cards hadn't updated the address. I always mail update letters when I move (which can all be done online now). The credit card company just didn't update the address and they mailed my bill to my old apartment.
Why didn't it forward?
Because they only mail when there's an actual charge, and my yearly Sirius XM charge went through on that card after the forwarding expired. So I was shocked when I saw a “LATE PAYMENT” red bubble on my credit report along with an alert.
Luckily, they removed the late payment when I called the credit card company telling me everyone gets “one” free pass. If the company is not willing to remove the late payment from your credit report, then, dispute it. Send a separate dispute letter to all three credit agencies letting them know that there was an error or a delay in mailing, and that should take care of it.
Step 5: Pay to Delete
If you have collections on your credit report, you can call the collection agency and tell them you wish to do a PAY FOR DELETE. If they offer a pay to delete, then you pay the amount they have negotiated with you in exchange to remove the negative account from your credit report.
Most of the time, they will settle for pennies on the dollar, but you need to get the agreement in writing. Let them fax you or email you a “pay for delete” letter.
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Pro Tip: If they don't offer to remove them, do not pay a collection. That will stay on your record for 7 years regardless of your balance.
People Also Ask
For FHA loans, you need a 580 minimum credit score and a 3.5% down payment. With Conventional Mortgage, you need a minimum credit score of 620. With a VA loan, you need a minimum credit score of 620.
While the FHA requires a minimum credit score of 580, you can pay down balances & increase credit limit to raise your score to this minimum.
The biggest factor is payment history at 35% then, credit utilization at 30%.
Yes. 1.2% of all FICO Scores in the United States currently stand at 850.
The five C's of credit is a system used by lenders to gauge the creditworthiness of potential borrowers. The five C's of credit are character, capacity, capital, collateral and conditions.
Hard inquiries, missing a payment and maxing out a card can hurt your credit score.
The four fastest ways to raise your credit score is by increasing your available debt. You do that by asking for a credit limit increase or by paying off credit card debt. You can also become an authorized user for a family's credit card. Then, if you have any inaccuracies on your credit report, dispute those. Here's a guide to disputing your credit report.
Here's how to raise your credit score by 200 points. Make sure you know what factors affect your credit score. Pay on time, every time. Pay down your balances to increase your availability. Keep old credit cards open so your history lengthens. Create a diverse mix of credit.