My debt repayment plan officially started in January 2015. I vowed to get current on all my bills and eliminate my debt. At the time, I had several installment loans and credit card debt. So far, it has been an exciting journey. Besides seeing the numbers get a little smaller each month, something else happened.
My credit score went up by 168 points in only eight months. That was amazing. When I checked my score in August 2015, I was utterly shocked to see that much improvement. In today’s post, I want to share what I did when I raised my credit score. You could increase your credit score by 100 points, depending on your score.
How to Increase Your Credit Score By 100 Points
The first thing I did was get current on every bill I had. It didn’t matter if it was a student loan or credit card bill. I made sure I got up to date with each one of them. I also set up automatic payments for a couple of my bills. That was huge for me. I’ve never had the discipline to do that before, but I was focused on making this happen. 35% of your credit score is your payment history. I had to make sure that my payment history was getting better.
How did I get current? If it was a debt or bill only a few days past due, I paid it, including the late fee. I called the company if it was 30-60 days past due. I let them know that I wanted to get current. I could either pay the companies what I owed them, or they set me up on a plan. I had to make three months’ worth of payments on time. Once that was completed, I’d be current. Believe it or not, making the payments was pretty easy, too. You can do the same thing to increase your credit score by 100 points.
Set a goal to start paying your bills on time. If you do this every month, your credit score will go up. It will show lenders that you are serious and improve your creditworthiness.
Stopped Using My Credit Cards
The next thing that I did was stop using my credit cards. My credit utilization ratio started decreasing when I just made payments to them. I went from having a 90% utilization rate in 2014 to getting it down to 45% by 2016. Since then, I’ve paid off my credit card debt and got back into it. That’s a story for another day, though. The good thing is that I never maxed out the cards again. Doing that would have negatively affected my credit.
Keeping my credit card balance low is one of the things that helped me get my finances in order. It will help you as well.
Make Extra Payments
You can next increase your credit score by 100 points by making extra payments to your debts. I started making additional payments to all my debts. I don’t know how much that helped, but it was something that I had to do. I got tired of looking at those ridiculous numbers. Doing different side hustles was the primary way I could earn extra money. If you need ideas, check out this, which features over 70 ways to make extra money.
When it happened, I was very excited at how I increased my credit score by 100 points. I never thought it would have increased by 160+ points in a few months. I’m proof that you can still improve your score even if you have thousands of dollars of debt. If you have a low credit score, I want you to realize that you can raise your score, too. You need to create a plan. Remember, 65% of your credit score consists of your payment history and the amounts owed. So make sure that you pay your bills on time. Don’t procrastinate like I used to do. There’s nothing fun about having delinquent accounts.
One tool I use when looking at my credit score is credit sesame. Credit Sesame has a financial debt analysis tool that shows you your total debt. It then breaks the debt into categories such as credit card debt, student loans, etc.
Credit Sesame also goes into detail about your credit score and credit report. They also give you several credit recommendations. Those recommendations include credit cards you can sign up for or personal loans to help you pay off high-interest debt. Did I mention that credit sesame is free to use? All you have to do is sign up.
If you want to get your credit score in order, click here!
Didn’t Open Many New Accounts
During this time, I didn’t open that many new accounts. The goal was to eliminate, not increase. Each time you apply for a new credit account, a hard inquiry is made on your credit report, which can temporarily lower your score. Avoid opening multiple new accounts within a short timeframe. Be selective and only apply for credit when necessary.
After reading this post, you can increase your credit score by 100 points. If I can do it, you can as well. It may not be easy, but you can do it.
I want you to get a copy of your free credit report. You can get at least one free copy yearly from the three major credit reporting agencies. The three credit bureaus are Experian, TransUnion, and Equifax. The reason that you should get all three of them is to compare each one. You want to ensure that there aren’t any inaccuracies in the credit reports. Make sure that all of your credit information is correct. That includes lenders, addresses, lines of credit, and more.
Once you have the credit reports, open a blank Excel sheet or get a pen and a piece of paper. Write down all of your bills and debts that you have. You should write the payment amount and the payment due dates. Also, note if you are past due or not. From there, it’s time to get to work. Follow the steps above and wait for your credit score to go up.
It may not happen overnight, but your credit score will improve. Hopefully, you’ll be able to say that your credit score increased by 100 points in a few months.
Jason Butler is the owner of My Money Chronicles, a website where he discusses personal finance, side hustles, travel, and more. Jason is from Atlanta, Georgia. He graduated from Savannah State University with his BA in Marketing. Jason has been featured in Forbes, Discover, and Investopedia.