Maintaining a good credit score is essential if you want to borrow money, especially since a high credit score literally can save you thousands of dollars in interest payments. According to a spokesperson for the National Foundation for Credit Counseling, it is possible to increase your credit score by a significant number of points within just a few months (see Reference 3). There are several ways in which you can raise your credit score by as many as 100 points at one time.
Step 1
Apply for forms of credit other than credit cards such as home mortgage loan or other type of installment payment loans. While there is nothing wrong with having revolving credit such as credit cards, some of your debt should be loans with fixed terms. A home mortgage loan, auto loan, student loan or other installment loan is considered easier to pay off than credit card debt, which can accumulate interest and take years to pay off.
Step 2
Ask your credit card company to raise your line of credit. If you get an increase but do not charge any more, this lowers the amount of your credit limit that you use. Lenders like to see that you are using less than your available credit. They take this as a responsible sign that you are spending within your limits.
Step 3
Get current on any late payments. Payment history accounts for about 35 percent of your overall credit score, therefore, having late payments removed from your credit report can quickly increase your credit score by as many as 100 points. Having the words "Past Due" appear multiple times on your credit report can do serious damage to your credit score. If you make a good faith effort to bring your payments up to date and then continue to make payments on time, creditors are usually willing to cooperate and make positive adjustments to your credit report.
Step 4
Keep an old account open even after paying off the balance. Many people do not realize that you can actually lose points for closing an old credit account, but having a long credit history does more to improve your credit score than maintaining a zero balance. Even if you only occasionally charge a small amount to a card, continue to use some of your oldest credit cards, as inactive accounts are not given as much weight in the credit scoring formula.
Step 5
Make it a goal to reduce the balances owed on credit cards by at least half. Using more than 30 percent of the credit available to you can negatively affect your credit score. Keeping credit card debt below 25 percent of your credit limit can work in your favor. Credit scoring experts for Fair Isaac point out that paying off a maxed-out credit limit on a card can boost your score considerably (see Reference 3). Getting a credit card balance to below 10 percent of the limit is one of the best ways to increase your score quickly.
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