imho
MB
Jake Stichler
Hobo
JeepersRaise your credit score fast and free
Here’s a quick tip on how you can raise your credit score very quickly without any cash on hand:
The Tip
Call your current credit card companies. Ask them if they will increase your limit. Even if you owe $1000 on a $1000 limit card, if you’ve been paying on time, there is a good chance they will raise your limit. This provides more “available credit” (debt to limit), a big key to raising your FICO score.
How it works
Let’s do a quick example to show how effective this is:
Let’s say you have three $1000 limit credit cards, each each has a $900 balance.
Card #2: $900/1000 limit. 90% utilization.
Card #2: $900/1000 limit. 90% utilization.
Card #2: $900/1000 limit. 90% utilization.
You give a quick call to each card. Card #1 raises your credit line to $1500, Card #2 to $2000, and Card #3 to $3000. Great!
Now:
Credit Card #1: $900/1500 limit. 60% utilization.
Credit Card #2: $900/2000 limit. 45% utilization.
Credit Card #3: $900/3000 limit. 30% utilization.
Total debt: $2700. Total Limit: $6500. Overall: 42% utilization!
Caution!
Now don’t go and use that extra credit!
*NOTE: When you are talking to the credit card company rep make sure you ask if they can do an increase without doing a “hard pull” on your credit report. A “hard pull” shows up on your report as an inquiry for credit, and can result in a quick 10+ point drop in your score.
Summary
So, in the scenario above. You dropped your credit utilization from 90% (very bad) to 42% (much better, under 30% would be best. Or even 0%!).
What did that cost you? Nothing! Just a few quick calls to your credit card companies. Especially for a younger person with a limited credit history, your credit utilization % is often the only factor you can control. You could easily see a 40+ point jump in your scores by doing the easy, free step outlined above.
Delete bad entries from your credit report (legally!)
If you’re credit has some issues, and you want results a little faster, you might check out a service like Lexington Law.
How To Get Your Score
NOTICE: Don’t get your credit score from anywhere else except myfico.com. They have real scores here, and often handy coupon deals. Currently the top coupon code I could find is: MW01 (looks like 20% off)
I'm 300K in debt. Gulp. I'm 24 and day traded away a fortune. Now I'm trying to crawl back to zero. Why not subscribe to my RSS feed and join me on this journey. You can also subscribe via e-mail. I appreciate tips and feedback! ~ DebtKid
on June 27th, 2007 at 3:17 am
It is worth adding that credit score only matters in a fixed number of scenarios, including buying a mortgage, and some insurance scenarios that I can’t fully define.
This year I earned $2,000 by borrowing at 0%. I pushed up to $80,000 borrowed, 50% total utilization, and 99% utilization of many lines. Banks can appraise my riskiness any way they want when I already have eighty grand in my pocket. It’s not like I need to borrow more at that point. Now I’m nearly paid back on it all, so I guess my FICO is back up.
The thing I say: Good credit is useful, but I certainly don’t want to *pay* for it. Not a penny. Not even a phone call if it can be avoided. To my knowledge, none of my schemes have cost me in insurance rates or mortgage opportunities. Your FICO score won’t drift particularly low if you pay your bills on time.
on June 28th, 2007 at 9:08 am
How does it affect my credit score if I pay off and cancell my credit cards..
on July 10th, 2007 at 12:04 pm
Instead of ordering my score from myfico I track it with my Washington Mutual credit card online. I opened my account as a Pay Pal VISA (from Providian) but Providian was bought out by Washington Mutual. The whole time I’ve had the account, I’ve been able to see by FICO score as reported by TransUnion to the credit card company. I guess the holders of your open accounts get free credit info on you in exchange for providing reporting. Providian passed this information on to me (with a delay of over a month - but I don’t need to know exactly what my score is today, just how it’s doing over time). I was very pleased when Washington Mutual retained this feature after they bought out Providian.
angie — pay off your credit card, but don’t close it. Destroy the card if that helps you to keep the debt off, but the open account is availible credit (a plus) and a history of maintaining an account (a plus - especially if you never missed payments). The only exception would be if your score is getting dinged for having too many revolving accounts - if you have a lot then close the ones that are newer or have low limits first.
on July 10th, 2007 at 12:15 pm
BTW - citibank’s web interface lets you make such a request and get an immediate response. This saved my bacon when I accidentally went over my limit one time (I found out because my credit card was refused). I was using the card for everyday purchases and paying it off each month. Sure it’s a bit of a ding on the old credit score in the short term, but in the long term it’s not a problem at all and my card gives me 5 points for every dollar at gas stations and grocery stores - redeemable for checks made out to the holder of my student loans! Anyway, after my card was refused, I checked my account online and saw that I had spent a lot of money in the past couple of months (I had already set up a payment for the previous balance, but they hadn’t credited it yet, so I didn’t think about how much was on it at the time - it’s amazing what car repairs, and trips can do to short term finances). Since then I’ve asked for an increase every few months - such a deal!
on December 17th, 2007 at 4:50 pm
Wow, I thought I had heard it all, but you suprised me. Most people say pay off the debt which is easier said than done.
GREAT tip!
on March 20th, 2008 at 7:37 pm
Wamu Fico is a most stupidit i ever see, they keep the old score for more than 45 day, so if you pay off few account in order to raise you score, you had to way more than two monht to see the diferent in wamu fico. any way the wamu fico alway be very low, if you compare we the real Fico, so ck , wamu fico only every two or tree montn
on April 12th, 2008 at 9:30 pm
OK, Salvador, do not try to blast other people’s suggestions because they are only trying to help. Also, learn proper grammar and spelling before posting anything because that makes you look like a total idiot. I mean come on! How could you spell “month” wrong twice in different ways in two runoff sentences?
on April 29th, 2008 at 5:52 pm
Several years ago when I was having a little bit of trouble with my credit score, I tried contacting my CC company in an attempt to raise my credit limit. My request was ultimately turned down. This is a great tip if you can actually get it done, but some of us will not be able to. I had to put all my extra money towards paying down my balance. Once my debt/credit limit ratio on my credit cards got below 50%, my score jumped 30 points.
on June 26th, 2008 at 11:53 am
My credit score is “45″ (2) digits can you believe it? What can I do about that. It has gotten so low because I owe this kid for some lemonade I got on an IOU.
on June 27th, 2008 at 11:55 am
John,
You couldn’t be more wrong. Your pay history is about 30% of your total credit scores. Revolving availability is key to your credit score. It’s simply a game. Keep your balances below 50% of your limit, and you will be good (30% if possible). If you and when you go above 50% of your limits on your cards, it will affect you negatively, and this is the single most important factor when altering your credit scores.
PS- Anything less than 720 score could affect you when applying for a Mortgage loan currently.