How Can I Increase My Credit Score?

If you're wondering how you can increase your credit score, you should know that there are multiple ways to go about it, and what works for one person will not necesarilly work for another. In this article, we're going to go over a few methods of increasing your credit score.

First of all, if you do not already know or if you need a refresher course on what factors contribute to your credit score, then click that link (it opens in a new window so you may continue reading this article as well).

I'm going to preface this article with what will probably be redundant to most of you, but I find that an amazing amount of people attempt to increase their credit score without proper access to their score in the first place. Just as you can't very well follow a proper weight loss regimen without a scale, you need consistent access to your credit score (at least monthly) to be able to see your progress.

If you don't already have access to your credit score, then I recommend this service, which gives you your score monthly at an extremely low rate: Get My Credit Score (opens in a new window). A free trial of the service is included.

Now that that's out of the way, let's begin discussing ways that you can increase your credit score.

Strategy to Increase Your Credit Score #1: Mr. Perfect

I call this strategy "Mr. Perfect." It is the most "traditional" method of working on your credit. It is a long term method that has lasting effects and is a good practice, but it will not increase your credit score quickly.

Being Mr. Perfect involves knowing what factors play into your credit score and using that knowledge to work WITH the system, rather than against it. And this makes a lot of sense.

To raise your credit score by being Mr. Perfect, you simply pay all of your credit cards and personal loans on time. You keep your debt to credit ratio under 30%, meaning that for every $10,000 you have in total credit limits on revolving accounts, you will have no more than $3,000 in charged balances. You only apply for new loans or cards about twice a year, and you are never ever late on your mortgage or car loan.

Yeah, I know what you're thinking -- this strategy is certainly obvious, but it is also the only strategy that works with 100% certainity for everybody, so I thought it would make sense to share it first. It does have its limitations, and I will get to the "workaround" strategies in a little bit.

Many people aren't really in the position to increase their credit score by being Mr. Perfect. You see, once you dig yourself into a hole, it becomes hard to get out of it without raising your income substantially. So while being Mr. Perfect should definitely be your ultimate, long term goal... it definitely makes a lot of sense to focus on shorter term strategies as well.

Strategy to Increase Your Credit Score #2: Mr. Leech

Mr. Leech has friends or family in high places, and uses them to boost his credit score by using a strategy known as "piggybacking" (if you don't know what this strategy is, then sign up to download my free credit report strategies report.

Piggybacking is an extremely effective strategy for raising your credit score, especially if you have a problem with high balances, no doubt. The problem with piggybacking is that it is a bandaid for a bullet wound. You see, piggybacking does very little to dilute your late payments, your collections, your judgements, or even your foreclosures, repossessions, or bankruptcies that you may have because of your overall situation.

Don't get me wrong, piggybacking is an extremely powerful strategy and can provide a boost to your credit score if you just made a few rash purchases and need to buy time while you pay your debts down. But if you have a credit file that's several pages in length with negative items... then there is a much bigger problem.

Strategy to Increase Your Credit Score #3: Mr. Fix It

Fortunately, credit can be repaired. Mr. Fix It tries to find "loopholes" or strategies to increase his credit score legally. If you dig enough, you can find such strategies (my report is a good place to start).

On the other hand, credit repair is something that takes attention to detail, and a bit of your time. If your time is worth a lot to you, you should probably think about enlistnig the services of others to repair your credit for you.

Surprisingly, being Mr. Fix It will not break the bank, even if you decide to "outsource" the work to others. This service, for example, promises to have everything from bankruptcies to collections to late payments deleted from your credit report, and boasts a low payment of only $29/month in exchange.

If you do opt to employ a service or loophole to increase your credit score, do yourself a favor and make sure it's only a short term strategy. Boosting your credit score will allow you to enjoy more financial freedom, but you're still going to want to focus on the "basics" and ultimately become "Mr. Perfect." Just keep that end goal in mind, because Mr. Perfect enjoys the most relaxed lifestyle.

Another thing you want to do is focus on increasing your income, because let's be honest -- if we had a healthier financial profile to pay everything on time and keep our debts down, wouldn't maintaining a healthy credit score be as easy as 1-2-3?

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