I constantly get the question: How can I instantly improve my FICO Score? And the answer is always the same. What is your definition of instantly?
Raising your credit scores is not an over night, quick fix process. It does take some time…however, there are some things that you can do to get improved scores in a month or two.
The first step to instantly improve your FICO Score is to pay your bills on time. 35% of your score is determined by your ability to pay your obligations on time. If you have late payments on your credit report that you believe are inaccurate – get them updated or removed.
The next step to instantly improve your FICO Score is to pay down the balances on your accounts. 30% of your credit score is dtermined by your debt to available credit limits. THE LOWER THE BETTER! If you have a $500 credit card, you should never charge more than $150, or 30%, of the available credit limit. I advise all of my clients to never use more than 10% of their available credit. I have clients who have had great success using this strategy to instantly improve their FICO Scores.
Lastly, and this is the best kept secret that not many people will share with you. One of the best ways to instantly improve your FICO Score is to Opt Out. When you go to Opt Out Prescreen.com you are removing yourself from all the companies that buy lists from the credit bureaus. By removing your information that they purchase you will no longer receive those annoying credit card offers in the mail. For some reason unknown to me this works. I assume that the credit scoring model sees that you do not get the “approved offers” in the mail – won’t go out and get new credit cards – won’t increase your overall debt to credit limits – and rewards you with a score increase. One client of mine did this and got a 30 point increase in two weeks! I should mention that this may not work for you…but at least you won’t be getting all that junk mail.
These tips will help you to instantly improve your FICO Score. See some of the related posts for more ways to improve your credit.
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Great advice, Ben! Thanks for the tips and tricks to improve credit scores. Nothing in business and personal financial life is more important than a good/high credit score — it affects everything from the rates you pay for insurance, rent and loans to job search.
Great article. Thanks for the tips, Ben. I had never heard of the opt-out affecting your score before.
One thing to consider, if you do feel you have to close an account close a newer account rather than an older account and an account with a lower credit limit rather than a higher limit. Closing an account can hurt your score in two ways. It can reduce your length of credit history if you close one of your older accounts. It can also reduce your available credit therefore increasing your overall ratio of usage (balance owed) to credit limit.
Another tip to keep your credit usage to credit limit low is to pay before the end of the billing cycle. The credit card company will report your balance to the credit bureaus as it appears on your monthly statement, so if you make a payment just before the statement comes out it will lower your usage ratio.
AllenDavis’s last blog post..Is Your Annual Credit Report Accurate?
It’s very important to understand the credit report. It’s even more important than credit score. Because when lenders want to loan someone, they ultimately look at his/her credit report. Credit score is just for a quick look so having a clean credit report certainly helps in a getting good rate and terms on any kind of a loan.
Mike,
Great comment. I just had a borrower get turned down by a lender because he had not established enough new credit since a BK. Good credit score, but lender still denied the file.
Benjamin
Very informative site, and very interesting posts. I have bookmarked your site, and will be back, good work guys.. thanks
And what about not having a credit card at all? I rely on Debit Cards and since now a days Debit Cards are also accepted everywhere, they’re better. But those who’ve to use Credit Cards for few purposes, for them these advices are great. It’s all about letting the bank know that you’ve got a good record and you’ll pay their loan back on time. Make your credit report as impressive as you can be before going for an interview to apply for loan.
thanks for this information very useful!
What about authorized users? Are still effective? I read articles people can still used them.
Great information regarding Credit score. This simple three digit number is going to change the life of every one and we shall be careful about this credit socre.
Tahnk you.
Michael,
I too have heard different reports concerning authorized users. The best information that I have found was by Sandra Block and John Ulzheimer.
Check this link out to find a little known secret about FICO ’08.
Thanks for taking the time to comment. I hope this helps!
Is it true that not having any credit at all can work against you? A relative of mine who is 60 year old and had never had credit in her life therefore not having bad credit was turned down for a loan even though she is still in full time employment her partner at the time (not married.) applied for her and is struggling to pay his debts and was given the loan? Seema a very backward system my advice would be to have a free credit check and if you dont have much credit against your name get out a credit card for a couple of hundred dollars spend a little on it then make small monthly payments.
FICO score, is arguably one of the most important pieces of information in financial life and a key factor in determining your financial position.Thanks for sharing.
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