Time to Raise Your Credit Score: But How?

There are times when you will need funds for something important. It can be for home repair, hospitalization or medicines, credit card payment, wedding, utility bills, moving home, funeral service, new car, travel, etc. The list could go on.


When you apply for a loan or even a credit card, you will be asked about your credit rating.


What is a credit score?


A credit score or rating is a three-digit number that will tell lenders how capable you are of repaying the money you owe them. In other words, banks and private lenders use your credit score to decide whether they’ll approve you for a loan or credit card.


How is a credit score determined?


Equifax, Experian, and TransUnion – these are the three main credit bureaus that create everyone’s credit reports. These are then used by scoring models, like FICO and VantageScore to determine a score, ranging from 300-850.


What do these agencies use to determine a credit score?


A person’s credit rating may be based on your payment history, length of time you’ve had credit, types of credits you have, credits and how much of them you are using, how much total debt you have, and hard inquiries on your credit score. Race, gender, religion, or even marital status isn’t a factor in your score.


Don’t be surprised to learn that you can have multiple scores at the same time. This is because there are lenders that use all scoring models. Others don’t report to all three credit bureaus or report to them at different times. All of this can cause you to have different scores.


How do you get a bad credit report?


If you’re not careful, you’ll end up with a low credit score. This can limit your options when it comes to applying for a loan.


Here’s what will hurt your credit score the most:


  1. Late payments
  2. Non-payments
  3. Loan defaulted or account charged off
  4. Account sent to collections
  5. Filing bankruptcy
  6. Court has gotten involved
  7. High credit card balances
  8. Maxed out credit cards
  9. Closed credit card with an outstanding balance
  10. Applying for different credit cards or loans at the same time


All of these factors can affect your financial life. If you’ve ticked off one or more of these, then you should seriously look into improving your credit rating.


How to raise your credit score?


It’s not impossible to rebuild your credit over time. Here are some steps you can take to repair your credit history:


  1. Pay bills on time.

This is one of the biggest factors that can help boost your credit score. It makes up 35% of a FICO calculation. Keep in mind that being a few days late of your payment can already have a significant impact on your score. Be sure to have multiple reminders so you’ll know when to make payments. You can also enroll in automatic payments to avoid missing any due date.


  1. Consider making mini-payments.

You can make several payments throughout the month to help build up your score again. By reducing your balance frequently in a month, you’re also trimming down your overall credit, which is 30% of your score.


  1. Pay off debt and keep balances low.

Another crucial factor in score calculations is the credit utilization ratio, which is calculated by adding up all your credit card balances and dividing the sum by your overall credit limit.


You can determine your own average utilization ratio by looking into your credit card statements from the last 12 months and then adding the balances for each month across all of your cards. Then, divide the amount by 12. The final amount will be your ratio. A ratio of 30% or less is most ideal.


  1. Don’t close an account.

Even if you’ve fully paid off a loan or credit card balance, you shouldn’t jump into closing off an account right away. Why? Leaving a trace of your debts or loans can actually help raise your credit score.


  1. Take advantage of programs that improve your standing.

Lenders determine how well you pay your debts through the number and average age of your accounts. This is why accounts with a limited credit history may be at a disadvantage.


To help boost your credit score, it’s best to take advantage of programs that can help raise your rating. These include UltraFICO and Experian Boost. Once you’ve enrolled in these programs, you should connect your online banking data and let the credit bureaus add your utility payment history to your report.


  1. Be careful when applying for a new credit card or loan.

A hard inquiry is pulled on your report when you apply for a new credit line. This can have an impact on your score, which can last between six and twelve months. To avoid this, get a pre-approval before actually applying for a new loan or credit card. It’s also important to time your credit applications, especially if it’s going to be a large amount, like a mortgage. See to it that you apply for the same type of loan within a safe time frame, which is usually from 14 to 45 days, according to FICO.




Improving your credit report isn’t going to happen overnight. To boost your credit score again, you need to do it slowly but surely. Most of all, monitor your credit without pulling a hard inquiry. Keep all these tips in mind to gradually raise your credit score.



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