Understand how to increase your credit score by 100 points in this article
Getting 100 points on your credit score is easier than many people think, especially if you have bad credit. Read on to get a testimonial from one of my interns, Kevin, on his method of increasing your credit score to over 100 points.
How to increase your credit score in short time? Check your current score. Most people don’t know what their creditworthiness is until they need it. Don’t be one of those people!
Good credit is your passport to competitive mortgage rates, cars, credit card deals, insurance premiums and more. Maintaining a high credit score pays off as you’ll save the money you’d pay with higher interest rates.
To perform this verification, the best companies are:
- Experian – Free Verification
- MyFICO – $15.95
- Credit Sesame – Free Verification
- Karma Credit – Free Verification
Fix problems identified in your credit score
Once you know your credit score, the second step is: How can we improve it? The best way to improve your credit score is to check your credit report. The score itself is not personal; all Americans fall to the same volume. However, your credit report is your only financial history. A credit report breaks down the following points according to their weighted importance:
Payment history (30%) – You pay your credit card, student loan bills, etc. within the time limit? Credit usage (30%) – The relationship between the loan you have and how long you used it. Loan age (15%) – How long are credit lines open? Mortgages, credit cards etc. – Mixed accounts (10%) – Different lines of credit – Loan inquiries (10%) – Too many difficult searches don’t look good, too many credit cards at once.
It’s important to know where you get your credit report, which is why I highly recommend Experian. Not only do you get this directly from the source (Experian is one of three credit bureaus in America), but it’s free when you create an account!
Take the first steps to increase your score
Now is the time to address the two factors on your credit report that will most affect your score.
- payment history
Did you know that losing just ONE grade can lower your credit score by 100 points? If you can’t pay your bills every month, I recommend setting a budget. This is your way to a higher credit score.
In a budget, you need to write down all your expenses for a given month and all your income sources. When math doesn’t work, you know what to do.
- credit usage
Loan usage refers to how much of the total credit card limit you are using. If you have a $10,000 line of credit on a card, you should never spend more than $3,000. If your limit is low or you can’t avoid spending the entire limit, I recommend purchasing a different credit card.
It sounds counter-intuitive, but the goal is to increase your credit limit without spending too much and it will also improve your credit score on your credit report.
What do you need to increase your credit score?
When we are college students, we always hear that having a credit card can be the start of a big problem. A credit card in the hands of a young person can end up creating debt that cannot be paid and an unaffordable lifestyle can emerge, all of which instead of encouraging these young people to save money.
These are real concerns and it is impossible for a young university student to determine if he would have these problems if he never tried to start his credit journey, right?
credit cards denied
In addition to all the doubt about the debt that a credit card can generate, banks often reject young people and don’t even try to give them a chance, as they don’t have a credit history, in addition to the college debt that needs to be paid some time later.
In the face of so many denials, there is a solution that increases credit scores quickly and helps not only college kids to get started on their credit history but also others. First of all, it’s important to stop trying to apply for credit cards, this is a strict credit check, which significantly lowers your credit score. The best option to increase your credit score by 100 points is the guaranteed credit card.
What is a secured credit card and how does it work?
With secured credit cards, you give the lender a cash deposit in advance, and that cash deposit is usually equal to your credit limit. This process can be confusing at first, as many believe that the deposit is money that can be spent. But actually, the deposit is there as security in case the user defaults.
It is not possible to spend the deposit, but it is possible to recover it if the account is current until the closing date of the card. After deposit, secured cards are also treated like conventional credit cards. Your secure card usually looks like a regular credit card, so no one knows it’s secure. Most secured credit cards also come with an annual fee, but I found it a small price to pay for the ability to build a credit history.
How To Increase Your Secured Credit Card Benefits
You can set your secured credit card limit. This limit should be an option for how much money you have and also how much you plan to use on your credit card.
You should try to increase your credit card usage by up to 75% to maximize your potential to improve your credit score. So if you’re only spending about $300 a month, you should have your credit card secured and an upfront $500 paying so you can use your balance instead of having a $1,000 limit and spending only $300.
More tips to increase your credit score by 100 points
Increasing my credit score with a secured card required some disciplined and careful spending. Here are the rules you can follow to maximize the benefits of your secured credit card: What you have:
Once you get your secure card and start spending money, make sure you’re only spending the money you already have or will receive before your next pay period to make sure you never get your balance on a month to the next. Know your limits: Never let your credit limit exceed $800, and never pay if your card balance is less than $300, unless your payment period has come to an end.
Shopping: Put every penny of your expenses on your credit card – from the smallest expenses like a drink at the gas station to big purchases like airline tickets or hotel rooms. Be consistent: Repeat this process for 5 months to build a credit history for regular use and always pay on time.
Why You and Your Children Should Have a Secured Credit Card?
Secured credit cards are a surefire way to improve your credit score when an ordinary bank credit card can’t. It’s a safe way to get credit if you don’t trust your child who is spending responsibly. The worst thing that can happen with a secured card is that you can’t pay the bill, your company closes the account and withdraws your balance with the money already deposited.
