needs Kasheesh
Table of Contents
- Dispute Credit Report Errors
- Pay Down High Balances
- Spread Out Credit Card Balances Strategically
- Ask for Higher Credit Limits
- Become an Authorized User
- Pay Your Credit Cards and Bills on Time
- Diversify Your Credit Mix
Raising your credit score opens up new financial opportunities and saves you money on loans and interest rates. Whether you're aiming to buy a house, get a new car, or simply improve your financial health, a higher credit score is key. If your credit score is on the lower end you might need to raise it by 100 points or more before making a large purchase, and you might be wondering how to do that in the fastest way possible.
How Fast Can You Grow Your Credit Score by 100 Points?
The speed at which you can raise your credit score by 100 points depends on your current credit profile and the actions you take. Generally, the lower your score is, the more realistic it is to see a 100-point increase over a short amount of time. While some strategies can show results in a matter of a few weeks, others might take a few months. Consistent, proactive efforts generally yield the best results. Here are seven effective strategies to help you achieve that goal quickly.
1. Dispute Credit Report Errors
Errors on your credit report can unfairly damage your credit score. By reviewing your credit reports from the three major bureaus (Experian, Equifax, and TransUnion) and disputing inaccuracies, you can potentially see a significant improvement.
Impact: Depends on the error. Correcting errors can increase your score by up to 100 points very quickly, especially if the errors are severe. However, the truth is that you might not have any errors – but always make sure to monitor your credit report to be sure.
How Fast It Can Work: Fast. The dispute process can take 30-45 days. Once the errors are corrected, you may see an immediate boost in your score.
2. Pay Down High Balances
High credit card balances relative to your credit limits can negatively impact your credit utilization ratio, a critical factor in your credit score. There's a common myth that holding just a bit of a balance will help your credit score: in reality it's actually best to keep your utilization as low as possible on each card – at zero if possible!
Impact: High impact – utilization rate determines 30% of your score. Paying down high balances can increase your score by up to 50-100 points, depending on how much of your available credit you’re using.
How Fast It Can Work: Fast. Reducing your balances can show results as soon as your credit card issuer reports the updated balances to the credit bureaus, typically within 30 days.
3. Spread Out Credit Card Balances Across Your Cards Strategically
Likewise, if you have multiple credit cards, taking a proactive approach and spreading out your payments across multiple credit cards will help keep your utilization ratio lower on each card which improves your overall score. To make this easy, you can use Kasheesh to split your online payments and purchases between up to 5 of your cards.
Impact: High impact – utilization rate determines 30% of your score. But as mentioned, this is more of a proactive strategy which will ensure your score doesn’t drop in the first place when making large purchases. particularly if it significantly lowers the utilization on cards that were maxed out.
How Fast It Can Work: Fast. The impact can be seen as soon as your balances are reported to the credit bureaus every 30 days.
4. Ask for Higher Credit Limits
Requesting a higher credit limit from your credit card issuer can immediately reduce your credit utilization ratio, provided you don't increase your spending.
Impact: Medium-High. Depending on the increase, this can boost your score by 10-50 points.
How Fast It Can Work: Fast. Once your higher limit is approved and reported, the effects can be seen within a month.
5. Become an Authorized User
If you have a trusted family member or friend with a high credit limit and good credit history, becoming an authorized user on their credit card can help improve your score by adding their positive credit history to your report. The account holder doesn’t even have to give you direct access to the account or give you a card to use, for your credit to improve.
Impact: It depends. It can have a high impact if you are new to using credit and have very low limits and credit age. It also depends on the credit history of the primary cardholders account you’re being added to. Length of credit history determines 15% of your score.
How Fast It Can Work: Fast. The benefits can be reflected on your credit report within 30 days of being added as an authorized user.
6. Pay Your Credit Cards and Bills on Time
Timely payments are crucial for a good credit score. Late or missed payments can significantly damage your score, while consistent, on-time payments help build positive credit history.
Impact: Highest impact – 35% of score. Regular on-time payments can boost your score by up to 35% over time, translating to a potential increase of 35-100 points.
How Fast It Can Work: Slow. While this is more of a long-term strategy, a few months of consistent on-time payments can start to show positive changes in your score.
7. Diversify Your Credit Mix
Having a variety of credit types (credit cards, mortgages, auto loans, etc.) can positively impact your credit score. Lenders like to see that you can manage different types of credit responsibly. So for example, if you only have a car loan, you’d want to add a credit card into the mix as well.
Potential Positive Impact: Low-Medium impact – 10% of score. This can increase your score by 10-30 points, depending on your current credit mix.
How Fast It Can Work: The impact can be gradual, as it depends on acquiring and managing new types of credit over time. However, opening a new type of account and managing it well can start to show positive effects within a few months.
Improving your credit score by 100 points can be an achievable goal if implementing these strategies. By disputing errors, managing your credit utilization (either by keeping track of it manually or by using helpful tools), and diversifying your credit, you can see significant improvements in your credit score in a relatively short time. Consistent, responsible credit behavior is key to maintaining and continuing to grow your credit score.
