How to Raise Your Credit Score Fast

Hey I'm Adam Jusko from ProudMoneycom and in this video we're gonna look at how to raise your credit score fast

But before we do that I would ask you to please subscribe to our YouTube channel if you have not already and if you have already I thank you for doing so So, in previous videos I've talked about the principles of building a good credit score and raising your credit score and I will add a link in the description below to a previous video which pretty much lays out kind of how a credit score is made and the best way to get a good credit score But what if you want to try to speed the process? You know, get your your credit score up faster, maybe you are going to apply for a mortgage or something else and you really want to see if there's a way for you to get your credit score higher, quicker Now this generally is not a quick process, it does take time to build a good credit score But there are some tactics that you can try and that have been shown to help people raise their credit scores quickly

Now I will say that the lower your credit score is, actually the easier it is to raise it quickly, because you either don't have a credit history or you have a bad credit history and, especially if you have a bad credit history, doing good things will help you raise your credit score quickly So it's easier to go from, say, a 500 to a 600 credit score than it is to go from a 600 to a 700 And it's easier to go from a 600 to 700 than it is to go from a 700 to 800 So these tactics will help you hopefully get higher quicker, but probably the lower your score is, actually the more effective these are going to be for you, and probably the truth of the matter is that you're more likely to be watching this video if you have a lower credit score and you want to get it up higher in a quicker period So I'm gonna talk about three tactics in particular and then we'll talk about some other things, some other do's and don'ts as well

But the number one tactic I would say is you want to keep your balances low in relation, and this is credit cards in particular I'm talking about, your credit card balances low in relation to your credit line And this is always true but when you are trying to raise your credit score quickly you should take this to the extreme Really try and keep yourself to no more than five percent of what your credit lines are, and that may mean that you even make multiple payments during the month in order to keep that balance as low as possible Now you don't necessarily have to pay it off in between the month and in fact you maybe don't want to do that because you do want to show that there's a little bit of a balance there so, you know, the score will reflect that you are actually using your credit But you want to keep it low

So let's say you have $5000 in credit lines, maybe on two credit cards If you are using those credit cards, even if you get to about $500, which would be 10%, if you're trying to raise that credit score quickly, make a payment mid-month — credit card companies don't care — pay off half of it, get yourself down to that 5% level, so that way you will actually continue to show that you were using those cards but it will always be at a very low level And the thing about how credit is reported and the way debt is reported, even if you're someone that pays off your credit card every single month, if the debt is reported mid month before you have paid it off, it's still going to show as debt because you haven't paid it off yet So you can have a great track record but it's still going to show that you were utilizing X percent of what your potential credit line is So this is a way for you to keep that number as low as possible and know that anytime your credit card company reports to the major credit bureaus it is going to show that your balance is very low

Now I want to make one thing clear: I am NOT saying that you should ever carry a balance from month to month and pay interest That is a no-no What I am saying is that you should keep a small balance during the month and then completely pay it off when your bill is due, OK? So that's a very big difference there Sometimes people will give faulty credit card advice and say "well, you improve your credit if you always carry a balance and if you pay a little interest" As if somehow the banks are giving you extra reward points in your credit score

That is not true You want to keep that balance very low and every month you want to pay it off But during the month even is when you want to make sure it stays low so that whenever it's reported to the credit bureaus it is always very low, and it never shows that you're using 40% or whatever, even if you were intending to pay it off and if you always have paid it off in the past So that's Number One Number Two is to ask for a credit line increase on your credit cards

Assuming you have some credit cards, you can call the credit card company and request them to increase your credit line Now, why would you do this? Because you want to again show that you are using very little of your credit in relation to how much you could use So the higher your credit line is, the more it shows that you can handle having that bigger credit line without using the whole thing, right? So that is a way that you can do this without opening a new credit card You can increase the potential credit you could have without opening a new credit card Now when you call, you want to make sure — there's no harm in actually telling the person on the phone, "I want to make sure this isn't gonna hurt my credit

I need this higher credit line but I don't want to do this if you're gonna do what is called a hard pull" Which is basically the same as if you were opening a new credit card That is very rare that would happen, it would almost be always be a soft pull, which would not hurt your credit because you're already working with a card company that has approved you in the past so they already kind of know your track record — they don't need to necessarily access your credit in the same way that they would for a new card But it never hurts to ask because you hate to find out that they did something that you didn't expect later on So that's Number Two

Number Three is to become an authorized user on somebody else's credit card that has good credit and who always pays off their balances on time Basically this is a way for you to piggyback on somebody else's good credit This is especially good for people that don't have a credit history and are having a hard time getting credit If you can be an authorized user on somebody else's credit card, that can be very helpful for you because it will report on your credit report as well as on that other person's Now you want to make sure obviously that that person has good credit because you know it's not going to help you if they're not paying off their credit cards every month

Now this could be a parent, it could be a sibling, it could be your spouse It can't just be anyone The credit card companies aren't going to let you be an authorized user on your friend's credit card and the truth of the matter is your friend's probably not going to let you be one anyway And that's a good way to kill relationships So make sure it's someone that is, you know, in your family or somehow related to you if you are gonna become an authorized user

But that is a way for you to potentially increase your credit without again you having to open new credit Because when we get to the don'ts, and that's where I think I'm gonna go now, is What you don't want to do is open new credit just to have higher credit lines, because every time you open new credit it's gonna ding your credit score a little bit

So you're trying to go up, you're not trying to go down, so that's not going to help you And then the second thing is you don't want to close old card accounts If you have an old credit card, oftentimes people will think "well, if I get rid of my credit, my credit score will go up" and that's not true actually So if you have an older credit account you'd actually like to keep that going because that is one of the factors in your credit score is the age of your accounts And so if your accounts are all new then your credit score is not going to be as high as if you have older accounts in the past

Because the longer you've shown that you could use credit responsibly, the better your credit score does So if you have old accounts, don't close them in an effort to increase your credit score because you'll actually do the opposite Now if you are someone who has bad credit and you have problems in the past where you defaulted on a card or something of that nature, say maybe you have something in collections or whatever — the big thing for you is you have to try and pay off as much as you can if you want to increase your credit score The good news is if you can pay things off you can increase your credit score more quickly and percentage-wise more than people with higher credit scores But you have to somehow make sure that you come up with that money and kind of get things right

Now in many cases if you have defaulted on a credit card or an auto loan or something, it's not going to help very much Obviously you would like to get right if you can, but the place where you can kind of help your credit score if this is possible is if you have things in collections You potentially can negotiate with the collection agency and basically say "I will pay off that balance that I still have if you will wipe it from my credit report" And sometimes the agencies will do that Not always, and the big credit card companies and stuff aren't going to do that if you default or whatever

They may take a smaller number but they're not going to take it off your credit report But a collection agency might So that is another thing for you to consider if you have bad credit Let's see, what else? I guess overall the other point is you still need to follow the good principles of getting a good credit score and that means that you have to pay your balance, you have to pay your bills on time every single month, that is the number one factor is paying your bills on time, so if you don't do that any of these other tactics are not helping you It doesn't make any sense to try and worry about your balances and all that kind of stuff if you're not paying your bills off on time

So that's gonna hurt you more than anything I guess overall the last thing I would say is at some point, you know, you're gonna want to stop doing these kind of tactics You don't always have to worry about getting your credit score higher and higher If you get up to like 800 then — even if 850 is perfect, you don't need to be perfect — if you can get yourself up to that 800 range, that would be great and then you don't have to worry about your short-term tactics You just worry about the principles — paying things off on time, not putting too much on your credit cards, and just doing everything right from month to month, and your credit score will continue to improve

And you also are going to build that history that means it won't get docked as much when you do some bad things here or there or if you open up new credit cards or whatever It'll always bounce back

So that is pretty much it I hope that is helpful to you Please go to ProudMoneycom, where we have other personal finance articles and credit card reviews and all sorts of other good stuff too Thanks for watching