Whenever we hear, or use, the phrase “zero to 100” our thoughts are immediately tuned to expect a rapid escalation of a subject. The expression comes from the automotive world. It refers to an automobile’s ability to hit the 100 miles per hour mark within seconds.
Usually, the shorter the time it takes, the better the engine. That means you’ll go harder, and use more power to hit that crazy mark!
Car engines are fascinating. But, an even more fascinating rapid escalation is raising your credit score by 100 points overnight. Some will say that it’s out of this world. You have to be crazy or a serious tech fraud to make it. However, increasing your credit score by 100 points in 30 days is not so crazy.
Perhaps you are looking to borrow in the next few months and you’d like to improve your chances for approval, get a better rate or increase your negotiating power. You can make your credit score rise rapidly. All you need to do is: figure out what’s dragging it, fix those issues and take steps to keep your credit score on the soaring path.
Read on and find out how to increase your credit score by 100 points real fast.
1. Figure out What’s Dragging Your Credit Score
Most credit scoring models in the U.S. span from a low of 300 to a max of 850 points. You are said to have good credit when your score ranges from 720 points and upwards. On the other hand, a poor credit score will typically be from 650 points and downwards.
Many Americans are caught in between 650 and 720 points and have a hard time breaking the glass ceiling.
If your credit score is stuck in that range or is lower, you need to know where it hurts before you can start raising it. You need to figure out what’s dragging your credit score by reviewing the top factors that impact your credit score.
What Factors make up the Credit Score?
Although there are different credit scoring models, popular models such as FICO, and Experian typically use the following factors to determine the score.
- The repayment history: This is the most significant factor and it contributes about 35% of the overall score. It is a record of how well you make payments on all your accounts. A late payment, accounts in collection, overdue accounts and adverse rulings such as tax liens will severely impact your score.
- The available credit limit contributes about 30% of your overall score. However, your credit utilization ratio is what really counts. A low utilization ratio (often less than 10%) deprives you of points. On the other hand, an excessively high utilization (over 35%) takes away vital points.
- The age of your accounts also contributes to your overall score. A positive credit history over a longer period means that you are a better manager of your finances and helps you get more positive points affecting about 15% of the overall score.
- The type of credit has a lower effect of about 10%. In this case, long-term and secured loans give you a better chance of earning more points than short-term, unsecured, facilities.
- Lastly is the credit inquiries you make. Credit scoring models have “reporting systems” which give feedback each time you apply for a loan or credit card. It’s called a hard inquiry and every time there’s a “hard inquiry” on your account, it takes away some points affecting about 10% of the overall score.
By focusing on these factors you’ll know what adjustments to make in order to soar your score.
2. Dispute Negative Account Information in Your Credit Report
Now that you are checking out your credit report and trying to figure out the moves to make in order to make a significant impact within a short time, consider disputing inaccurately reported negative items.
Credit reports usually contain lots of info about your credit history. But some of the info could be inaccurately reported or an outright case of identity theft.
You have the opportunity to check through your credit history and dispute info which could be inaccurate or false.
But, you’ll need to be meticulous as you comb through the report. If you find any item on your report that hurts your credit score and isn’t accurate, the FTC provides guidelines on how you can dispute such entries in a credit report.
However, handling the dispute process can be confusing and the bureaucracy of dealing with large corporates can frustrate you. Fortunately, you don’t have to go through that kind of frustration. Experienced credit repair companies such as The Credit People, Lexington Law, CreditFirm.net and Credit Repair can offer tremendous assistance when disputing credit reports.
What Do Credit Repair Companies Do?
Credit repair companies work systematically. First, they will consult with you and review your credit report. Then, they will conduct a legal audit of your credit history and seek verification of the disputed items from the creditors and bureaus.
Here’s the catch, disputing items requires that you come up with evidence to back your claim. However, a verification request puts the ball on the creditor’s or bureau’s court. If they are unable to verify and back up such an entry within 30 days, they are obliged to delete the item.
Since we all know how inefficient some lending organizations are with these records, chances are high that they won’t have the necessary back up. Especially if you can prove it wrong.
However, if they are able to support the report, it doesn’t stop there. Then, the credit repair team will counter with your evidence, back it up with legal grounds to dispute the entry. If the argument is compelling, the negative item is purged from your report.
Disputing incorrect items from your credit report is an effective way to reclaim those vital points. According to a study by the FTC, disputing erroneous information helped complainants gain up to 25 points in their credit scores. A few standout cases, one in 250 disputes, resulted in a score change of over 100 points.
A rare fete, but worth the try.
3. Contact the Creditors and Collection Agencies
You might be thinking “I don’t want to be confrontational,” and want to avoid credit repair companies. In that case, consider directly negotiating with your creditors and collection agencies.
If you have small balances on a collection account that are reflecting in your report and you don’t mind paying up, reach out to the creditor or collection agency and negotiate.
What do you ask for? A purge of the negative item from your report if you agree to pay up.
Why should they buy into your proposal?
Collection agencies and creditors primarily want the debt settled. So, a request for payment for delete or to purge of the negative account in exchange of voluntary payment is not a far-fetched idea.
If you are able to get such an agreement, ensure that it is in written form and the letter clearly states the terms.
4. Pay up All Your Overdue Debts and Keep a Perfect Record of On-time Payments
Overdue debts, which have crossed the 60-day mark are extremely damaging to your credit score.
If you have any overdue account, make sure it is paid up before you embark on making the current accounts regular.
Repayment history contributes up to 35% on your credit score. Therefore any plans to increase your credit score by 100 points must entail regularizing all your overdue accounts and maintaining a perfect record of on-time payments.
On the overdue accounts, try and negotiate for a pay-for-delete deal. If that doesn’t come through, go ahead and still make the payment.
An account overdue for 60 days hurts more than one that is 30 days old.
Will it give you results within 30 days?
Although the effect of settling overdue accounts may take slightly longer, it is worth the shot since the impact is long-term.
How can you maintain a perfect record of on-time payments?
You can sign up for due-date reminders from lenders, or maintain your own calendar to track the bills. Nevertheless, if you struggle to keep up with schedules and to do lists, set up auto-payments directly from your checking account.
5. Keep Utilization within Your Limit
Credit utilization refers to how well you use your credit limit.
Most credit scoring models peg this aspect as one of the high-ranking factors affecting up to 30% of the overall credit scores.
When utilizing credit cards, lenders reckon that you shouldn’t exceed 35% of your limit.
This fraction is usually pegged to your debt-income ratio which is used to calculate your credit limit. Exceeding the 35% mark would indicate risky borrowing and it has a big impact on your score. On the other hand, underutilizing your credit limit denies you vital points.
So, if you haven’t been using your credit limit, start using it. If you’ve exceeded the 35% threshold, cut down on your credit utilization by making payments or shifting some portions of card debt to other forms of loans such as personal loans or seek a limit increase.
How will this enhance your chances of increasing your credit score by 100 points in 30 days?
As soon as the credit card issuer reports the adjustment in the utilization ratio (or an ideal utilization ratio) to the bureau, which is typically billing cycle, the changes will reflect on your credit score.
6. Don’t Be Quick to Apply for New Credit Cards
Speaking of increasing your credit limit. You may come across a good deal on a new credit card that offers just what you want, a higher limit. However, before you leap, check if you really need it.
Each time you apply for a credit card or any other form of credit, it results in a hard inquiry on your score.
Hard inquiries take away vital points from your credit score and can prevent you from raising the score in record time.
If you’re looking to get a new credit card, you can make soft inquiries and track your credit score on Credit Sesame. It’ll give you a good indication of what kind of deal you should look for in a credit card.
Make sure you really need the credit card or loan, and that your chances for approval are high before you make an official application.
7. Become an Authorized User
Now that you’ve read how to plug those credit score leaks, it’s about time that you turned the guns and start gaining some points.
You can gain vital points and make significant advances in the quest to increase your credit score by 100 points in 30 days by riding on another person’s great score.
Simply ask a trusted friend/relative/parent/ spouse to add you as an authorized user on their credit card. The good side is that he/she shouldn’t fear that you could one day turn and mess their credit history. You can be an authorized user without the privilege of holding a card.
If the primary account holder is prudent in payments and has a great credit history, you’ll benefit from his or her great score!
However, your score will plummet should the primary account holder fail to meet their financial obligations.
8. Lift Your Credit Score with Rent Payments
Lastly, rent is perhaps the most consistent bill you’ve had to pay over the last couple of years. The good news is that you can use these payments to raise your credit score.
If you are a renter and want to increase your credit score by 100 points real fast, consider paying rent using your credit card. It automatically lumps the payments on your credit report. But, you’ve got to check with your landlord first and clarify that they accept credit card payments. You’ll also need to agree on how to meet service fees payments.
Alternatively, go for a rent reporting service. Simply register with the Rent Report Team. Inform them each time you make a rent payment and voila! Your rent payments will start to count on the overall credit score.
Alternatively, you can get your landlord on board and they will benefit from amazing information on how to zero-in on great tenants, and strategies to attract the right people.
This is the one good thing you can do for your landlord.
Here’s the Bottom Line
Increasing your credit score by 100 points fast is not an easy task. You’ve got to understand and confront the issues that affect your credit score. You should also start making smart moves such as keeping your credit utilization in check, reporting your rent payments and becoming an authorized user in a perfect account. Such moves will go a long way in bringing you closer to the mark.