How I Raised My Credit Score by 200 Points (And Mistakes I Made Along the Way)

Credit is a tricky thing. It's like surfing – you're gonna go up, and you're gonna go down. And when you go down, it feels like you're going to drown.

I hate even talking about it because everyone's situation is so different! However, I am finally (finally!) part of the “good credit” (700+) club, and wanted to share some of my tips, tricks, and ideas to get you started on increasing your credit score as well.

How I Raised My Credit Score by 200 Points

I'm not an expert by any means, and this has mostly been trial and error for me. As of two years ago, I knew very little about credit, and understood even less. I went to a “credit expert” that gave me all kinds of shitty advice. I followed it, and my score actually went down. I got fed up, started doing my own thing (which I show you how to do in this post), and my score went from the high 400s to over 700.

Improving credit takes time. Damaging it does not. What I mean by this is, you can work really hard on building your credit score for years and years, and one or two things can completely destroy it – depending on what those things are. In my experience, credit is a fragile thing and you must always be conscious of the decisions you're making and how they can affect your score.

I do not own a house (yet!), and we do not have car payments. I have heard that both of these things (a mortgage and/or car loan) can increase your credit score significantly. While we are in the process of buying our first house, we never want to have a car payment. We pay cash for everything we possibly can, which is another reason our credit sucked so bad when we started working on it.

What works for me might not work for you, and vice versa. However, the tips I'm giving you here are somewhat universal and should help improve your score. Based on your current situation, do some research before jumping in, because the last thing you want to do is lower your score!

2. Sign up for a free account at – yes, it's legitimately free, no they're not paying me for this post (but if you know them, send 'em my way so I can get paid, cuz it's an awesome post, yo). You do not put credit card information in. Use the “credit simulator” tool to see where your score will be (it's fairly accurate) if you open a new card, close a card, get a loan, or whatever else.

Then, get a full credit report for free at – you can request this once per year. It's a federal regulation or rule of some sort. Don't sign up for any of their extra crap. It gets expensive.

3. Sign up for new credit card(s). This step includes three parts:

Understand credit cards and how you should use them. The goal here is not to open a bunch of new credit card accounts and spend in a crazy way, which I'm sure you know. However, did you know that even utilizing 30% of your overall credit card limit can lower your score (or keep it from going up)?

When I was utilizing even 12% of my credit card limit, my score was stuck for a few weeks. I paid off some more balances, paid down one of my small cards, got an increase on another card, and my utilization went down to 5%. My score instantly increased 7 points according to one report, and 34 according to another! That's a huge increase.

Use your cards and pay them off monthly. Keep a low balance, if you keep one at all. Utilizing less than 10% of your credit card balance is tough, but it's ideal.

Another thing you've gotta understand: hard inquiries can and/or will hurt your credit score. I don't care how many people SWEAR to me that they won't, I've lived it. I've watched it happen to my own credit. It happens, especially when you have a low credit score. You have to weigh the good and the bad. Is it worth dropping a few points in order to go up several points in the long run? Generally speaking, yes it is.

I can't tell you how pissed off I was that my mortgage guy kept dragging his feet and dragging out my credit checks. Because he literally doesn't understand how to move quickly, he pulled my credit THREE times. The first two times, it dropped my score by about 10 points (each time!). The third time, I had already increased my score to 650, and it only lowered it by only 3 points. Don't let someone pull your credit unless it's necessary.

Assuming you follow directions, you're already signed up for Credit Karma; so just click “My Recommendations” to get started.

Check for these things:

APR – You want a low APR, but that isn't usually possible with bad credit. Heck, even with “good” credit, I get offers with 24% interest. Credit cards are expensive!That means if you make a $1,000 purchase, you're paying 24% on it. Do the math. Not cool. So, do what you can to get a lower interest credit card. After you've had it for a while (say, a year, with no late payments), call and ask them to reduce your interest rate. Usually they will, even if it's just by a percent (which adds up!).

Annual Fees – Some cards charge an annual fee of $99, so watch out for that. Not only could the $99 put you over your limit (which means lowering your credit score, getting over the limit charges, etc), it could also overdraft your bank account if you have automatic payments set up (which I do/don't recommend; see below).

Approval Odds – Unless it says “good” or “very good”, I don't apply. If your best option is “fair”, then go for it (I had to at the beginning).

Member Ratings – If it has 3 stars or less, I steer clear. 4 or 5 stars? Go for it. Find out why other members rate the card(s) they way they do, and decide whether those things are important to you.

Is it a secured card? If you have terrible credit, you'll most likely have to sign up for a secured credit card. The first one I signed up for had a minimum of $200. So, I saved up $200 (which took forever), and sent it to be put on a secured credit card. This means they have my $200, until I close my card (which will lower your credit, so don't close it!). This is tough to do, especially when you're struggling financially or living paycheck to paycheck, but it truly is the first step to improving your credit score.

Sign up for an in-store credit card. Whether it's at Sears, Kohl's, JCPenney, or wherever else, sign up for one in-store credit card to start (you can actually do this online as well). I am up to four cards now, all at places I either don't ever shop at, or can control myself at. I'd never sign up for a Wal-Mart credit card, and signing up for a Torrid card was a huge mistake because I'd drop $1,000 at Torrid without blinking. Because I have zero self-control in that store, I tore the card up after the first time I used it.

MISTAKE I MADE: I signed up for a Barclay card and bought an iMac desktop computer (best investment ever, by the way). The limit was $2,000 and the computer cost $1980. This was a big mistake. Why? Because now my credit card utilization for that card was almost 100%! Now what?

HOW I FIXED IT: At first, I couldn't afford to pay more than like $100 a month on the card. I knew I was going to get absolutely annihilated when the interest kicked in (I had free interest for 12 months), so I worked my ass off as a Virtual Assistant to make more money. In four months, I paid the card off. This increased my score quite a bit.

4. Look over your credit report with a fine-toothed comb. If there are any inquiries on your report that you did not approve of, dispute them. If there are any negative marks, dispute them. Some suggest disputing legitimate claims if they're old, because they might just get taken off. I don't like the idea of doing that, because I feel like if I spent the money or did whatever it was to get the item on my credit, I need to take care of it not just get it taken off. However, whatever you feel comfortable with is what will work best for you.

If you decide to pay off what you owe, when you call your creditors, ask for a settlement offer. Depending on how big of a hurry you're in to increase your credit score, you might be able to play a little hard ball here. Last year, I called a medical creditor that said I owed $480. I asked for a settlement and they said absolutely not. I left it alone until a few months ago, and called them back. I asked what their best offer was. It ended up being $240. I paid it, without hesitation, because I knew that was as good as it was going to get … and I wanted to raise my credit score some more!

5. Pay off your debts. I kind of covered this in Step #4, but it's important to realize that until you pay off your debts, your credit score will only go up a little bit (if at all), and will stop at some point. If you owe $10,000 and think you can never afford to pay it off, call and set up a payment plan. Most creditors will work with you. If they won't work with you this month, try again in a few months. Ask for their “best offer”. You don't have to be bitchy, but be firm. Don't beg them and say you need this or that off your credit report – be professional but assertive.

Setting up automatic payments on credit cards: good or bad?

I say it's both. On one hand, setting up a payment for only the minimum means your payment will post in time and you won't get a ding on your credit for a late payment. On the other hand, that means you're only paying the minimum, which I never recommend.

What if none of this will work for me because I'm completely flat broke?

#1, get a job. I don't mean that in a snippy “you're a loser if you don't have a job” type of way, I mean it in the “tax refunds are freakin' awesome when you're poor” kind of way. Two reasons: tax refunds, and proof of income when buying a house. When I was working a minimum wage job and had two kids to claim, my tax refund was $5,000! That's a lot of money. Secondly, without a job you aren't getting a house!

#2, where there's a will, there's a way. If I can figure it out (remember, I was homeless not too long ago), so can you. Prioritize and make it happen. (Need to make more money? Become a Virtual Assistant.)

#3, you'll need a job or some type of income if you want to get a loan for a house, car, etc.

This is different for everyone; raising my score 100+ points took only about 7 months of me actively working on my credit. However, the last 100 points were much easier than the first 100 points. So, I think it just depends on lots of things: how low your score is, your credit history age, if you have any derogatory marks, how much your credit card balances are, etc.

Is Credit Karma accurate? I heard it wasn't.

Yes and no. Credit Karma gives you scores from two of the three credit bureaus. Based on my experience, they're close to the same as what my mortgage lender told me his scores showed for myself and for Rachel while getting pre-approved for a mortgage loan. For more options to check your credit score, visit

What if I have a bunch of derogatory marks on my credit and can't pay them off?

Bottom line is, you're going to have to pay them off or file bankruptcy. Read my tips about asking for settlements. Rachel's score was about the same as mine, but I had a judgment ($1,800) on mine. I opened a store credit card for her, made one purchase, set her card up on automatic minimum payments (it'll be paid off before the interest kicks in), and her score jumped from the low 500s to nearly 700! Just from doing one thing! I was really annoyed, of course, because I had been working on mine for months at this point and it had barely moved. I paid the judgment off, opened a few credit cards, and paid off the ones I had balances on. That's what has helped me the most.

Will Paying Off My Debt Help My Credit?

If you are considering applying for a loan, or you just want to improve your credit, you may be wondering, "Will paying off my debt help my credit?" The answer to this question is a resounding yes.

Why Will Paying off My Debt Help My Credit?

When asking the question, "will paying off my debt help my credit?" most people are referring to their credit score. This score -often called a FICO score after the Fair Isaac Corporation which pioneered the scoring formula- is a three digit number between 300 and 850. Few, if any, individuals have a 300 FICO score or an 850 FICO score. As of 2010, scores above 700 are generally considered good-to-excellent, while scores under 680 are fair and scores below 620 are considered poor.

Your FICO score is determined by five major categories. Although each of the three credit bureaus- Equifax, Experian and TrasUnion- compute your score somewhat differently, they all use this basic formula.

The major components of your FICO score include:

  • Payment history: This accounts for 35 percent of your score and consists of your record of payments, and a list of any judgments, accounts sent to collection or bankruptcies.
  • Amounts Owed: Also referred to as debt-to-credit ratio, this factor refers to the amount you owe and the amount of available credit you have used. It accounts for 30 percent of your FICO score. This factor is the reason paying off debt will help your credit.
  • Length of Credit History: This factor refers to the average time your accounts have been opened, and comprises 15 percent of your score.
  • Types of Credit Used: This factor, which accounts for 10 percent of the score, refers to your mix of credit products.
  • New Accounts: This final ten percent deals with the amount of new credit accounts you open.

The reason paying off debt helps your credit score is because lowering your balances has a positive effect on your debt-to-credit ratio. When you are issued credit, your creditor gives you a maximum credit line. This is also referred to as your credit limit. You can charge up to this limit. Lenders, however, do not like to see "maxed out" cards, or cards charged up to your limit. If you use a high percentage of your available credit, it can indicate poor financial management skills. It can also signify that you may begin to have trouble making payments. For this reason, a high credit utilization can cause your credit score to drop.

Most experts recommend keeping your credit utilization at around 30 percent in order to achieve the best credit score possible. If you have used more than 30 percent of the credit available to you, then paying off this debt will definitely help your credit score.

How to Improve Your Debt to Credit Ratio

In addition to improving your debt-to-income ratio, paying off debt by making a series of on-time payments can also have a positive impact on the payment history component of your score. Even making the minimum payments on time is sufficient to achieve a good score.

Debt reduction can be a time consuming process. Shifting your budget or earning extra income to send in additional debt payments can be a useful way to pay down your debt faster, but isn't always possible.

People looking to improve their credit scores may instead consider raising their credit limits. By doing this, you also alter your debt-to-credit ratio to a more favorable number. Since your credit limit is higher, the balance you have on your cards is lower in relation to the new limit than it was to the smaller limit.

However, be aware that when you apply for a credit line increase or apply for a new credit card, this can actually hurt your score by lowering the average age of your accounts (if you open an entirely new account) or by displaying as an inquiry (a request for new credit) when you ask your existing lenders to raise the limits on your cards.

If your lender is willing to raise your credit limit without running a credit check, this can be a shortcut to improving your debt-to-credit ratio while you pay down debt, since you won't have an inquiry but you will have a better debt-to-credit ratio. Not all lenders are willing to do this, but if you have been a good customer and have a history of on-time payments with your lender, it is worth a phone call to ask.

Achieving a good credit score is definitely a worthwhile endeavor. Having a high score can save you thousands in interest over your lifetime as you get preferred rates on mortgage payments and car loans.

While paying off debt can seem like an arduous process, it is worthwhile to improve your financial situation. Plus, you'll have the added benefit of paying less in interest if you pay off your debt faster.

will raising my credit limit help my score

I did very well on a debt management plan with Navicore Solutions. I had paid off all of my debt about three years ago through the plan. One year after that, I got my first credit card since completing the debt management plan. It had a low credit limit. Yesterday I received a notice in the mail from the credit card company telling me that they have increased my credit limit substantially due to my good payment history. My question is, will this hurt my credit? I have a decent credit score and want to avoid doing any damage.

Will raising my credit limit help my score

It is great news that your credit is good enough to receive an offer of a credit limit increase! The impact on your credit score would most likely be positive. The Fair Isaac Company, who generates the FICO credit scoring model, states that credit utilization makes up 30% of your credit score. Credit utilization is the percentage of the amount of your available credit that has been used. For example, if there is a $10,000 credit limit on a credit card and you have a balance of $5,000, your credit utilization ratio is 50%, the lower the credit utilization percentage, the better. Therefore, increasing your credit limit without increasing your debt will lower the credit utilization ratio.

Here is the bad news; statistics have shown that increased credit limits often result in increased debt. Having more available credit may cause temptation to overspend, and in the end cause significant damage and expense. I suggest that you weigh the pros and cons in your particular situation. While the credit limit increase may help raise the score, it can also result in overspending. Please reach out to one of our certified credit counselors at 1-800-992-4557, and discuss your personal situation. We are here to help!

Kim Cole is the Education Outreach Coordinator for Navicore Solutions. Kim provides financial education workshops and seminars to communities. Readers can submit general questions relating to personal finance, credit scoring, debt management, student loans, home finance or bankruptcy which may be highlighted in the next month’s edition. All identifying information will be kept anonymous.

Please send your questions via email to [email protected]

Will raising my credit limit help my score

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How I Raised My Credit Score 150+ Points

Although I knew my credit score was important, I never realized the significance. Check out this story about when I checked my credit score for the first time and raised my credit score 150 points.

I will never forget the first time I pulled my credit score. I was in my early twenties sitting around with college friends. One friend just received a letter regarding a medical bill in collections that he didn’t realize existed. So he decided to pull his credit report and credit score to see where he stood.

I thought to myself, I’ve never pulled my credit report before. I followed my friends lead and pulled my credit score too. My credit score had to be good. All my bills were paid on time (for the most part). I only had one $800 credit card from college.

Boy, was I in for the shock of my life!

Staring patiently at the screen, it finally came up. My credit score was a 580! 580! No, that had to be wrong. I was mortified. That couldn’t be right. I thought I was responsible. I thought my credit score would reflect that.

My credit score was only part of the story. Therefore, I took the following steps to raise my credit score.

The first step I took in order to raise my credit report was to pull a free copy of my credit report. I went to in order to get a copy. I was fairly shocked by what I saw when I pulled my credit report. It turned out there was a medical bill for a few hundred dollars showing in collections. I didn’t even know about it. I immediately called the collections company to negotiate the bill. They said I could settle the account for a lower amount but it would still appear on my credit report; however, if I paid the item in full, they would remove it. During the next pay period, I paid the bill in full.

It turned out there was a medical bill for a few hundred dollars showing in collections on my credit report. I didn’t even know about it. I immediately called the collections company to negotiate the bill. They said I could settle the account for a lower amount but it would still appear on my credit report; however, if I paid the item in full, they would remove it. During the next pay period, I paid the bill in full.

Remember that one $800 credit card that I mentioned earlier? The only credit card that I had. Well, I failed to mention that every month it had an outstanding balance of at least $700. In fact, it got pretty close to the $800 on multiple occasions.

Your credit score takes into account your credit utilization ratio – or how much debt you have compared to your credit limit. Therefore, I was using over 80% of my available debt. To creditors, it appeared that I was overextended. My next step was to pay down my credit card balance. I needed to get the outstanding balance down to at least $250.

Using most of the balance wasn’t the whole story on that $800 credit card account. In addition, the monthly payment was paid late on multiple occasions. Besides the fact that each late payment resulted in an ugly late fee, it was also being reported to the credit bureaus as a late payment.

Payment history accounts for 35% of your credit score. Therefore, those few late payments had a large impact on my score. From that moment on, I was determined to not make a late payment.

This last step in the journey to raise my credit score took time. I went to the credit card company and asked for a credit limit increase. At first, I was denied the increase, but after asking a year later my credit limited doubled to $1600.

Credit limit increases are often frowned upon in the personal finance sphere but I love credit limit increases! Why you may ask? The more available credit you have makes your credit utilization ratio lower. Therefore, if I still had the $250 on that credit card and the credit limit is now $1600, my credit utilization ratio would be 15%. The important thing to keep in mind is just because you have the higher credit limit, does not mean you have to spend the additional money.

Ultimately, it took some time to raise my credit score. Since initially checking my credit report and credit score, I check those items every few months. After checking my credit score earlier this week it was well in the 700’s.

At the end of the day, back then I didn’t understand my credit report or credit score. Check out this detailed post about credit report basics so you can understand what information is used to calculate your credit score. It took me years to raise my credit score but it doesn’t have to take you that long. There are many other techniques to improve your credit score. Are you interested in a free consultation of your finances?

There are many other techniques to improve your credit score. Are you interested in a free consultation of your finances? Click here for a free 15-minute consultation.

Will raising my credit limit help my score

I hope you enjoyed the story of how I raised my credit score 150 points. When is the last time you checked your credit score? What actions have you taken in the past or are you currently taking to raise your score?

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