5 Ways to Add 100 Points to Your Credit Score

bump your credit score 100 points
Bump your score 100 points - Image by Michael Gaida via Pixabay

 

If you’re at the threshold of a credit category (fair, good, excellent), tacking on an extra 100 points can get you there, but how can you do it? While it’s true that re-establishing your credit after a financial fiasco is a marathon, not a sprint, there are some things you can try to fast-track your way to a better credit score. Here are five ways you may be able to add 100 points to your credit score – depending on your report, finances, and what’s holding you back.

1 – Clean up errors

The first thing to do is scour your credit report. Look for any items that are incorrect that could be dragging down your score. Simple clerical errors won’t matter, but some things are significant. A payment posted as late that you paid on time is a crucial mistake that can harm your score. Even if you legitimately paid something late, if you only did it the one time, call the creditor and ask for a one-time pass. If you can get them to remove that item, that can boost your score instantly and make a difference.

2 – Pay down balances

One of the major components of your credit score is credit utilization. If you’re carrying 25-30% on your cards (or more), your score isn’t as good as it could be. To check utilization, add up your total credit card debt and divide by the total credit lines you have across all cards. If it’s more than desirable, pay it down ASAP and then next month, you should see a credit score increase. Ideally, you should use your cards only for items you can afford to pay off in full that month.

3 – Get credit line increases

If you can’t afford to pay down your credit line balances right now, another approach to reducing your utilization percent and bump up your credit score is to request credit line increases. Since total balances divided by total credit lines equal utilization, reducing the numerator or increasing the denominator both work to improve the statistic. Reach out to your creditors and ask for credit line increases. The worst they will say is no, but if they do bump you, your score should improve.

4 – Deal with delinquency

For any lingering unpaid items, clearing this up will improve your score. Contact the creditor and work out payment arrangements. If you can pay on the spot, you might be able to talk them into cleaning the item off your credit. Be sure to record the conversation (if it’s legal in your area), so you have them on the record agreeing to these terms so you can enforce them later if they don’t follow through and clear the negative item off your credit.

5 – Clean up a collections item

Debt collections are frustrating because they represent a double hit to your credit score. The first item that was reported by the creditor when you didn’t pay reduced your credit score. Then, when they turned it over to a debt collector, they likely also recorded an item on your record which lowered your score some more. If you can pay off the item, do so, but first get them to agree to remove the collection from your credit. Record the proceedings so you can enforce the conditions after you pay.

A note of caution!

If you’re looking to pay off a debt collection item or delinquency, first look at the statute of limitations on the item and balance your concerns. In North Carolina, most consumer debt has a statute of three years. That means from the date the debt went delinquent (date of your last payment or charge), after three years, the creditor/collector can no longer pursue legal remedies.

If you make a payment, you restart the statute clock ticking. Legal statutes differ from the credit report clock. Items generally fall off your credit report seven years from the date of last activity. So, it’s wise to look at the datelines for both to determine what’s best for your financial future before you take an irreversible action.

To find out more about improving your credit score, check out our Credit Score Keys DVD.

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