How to Improve Your Credit Score By 100 Points

Waiting for your credit score to improve may be as interesting as watching paint dry, but it’s well worth the wait. Seeing your score jump 100 points can help you qualify for lower APR credit cards and a lower mortgage rate.

How do you raise your credit so you can actually see a noticeable jump in your score? There are a number of smart moves you can make, but you won’t see results tomorrow, especially if you’re aiming for 100 points. Here’s a step-by-step guide on how to raise your credit score by 100 points in about six months.

Eliminate your credit card debt

There are several varieties of debt, but the most influential, when it comes to credit scoring, is credit card debt. This is going to include general credit cards (Visa, MasterCard, Amex, Discover), department store or retail store cards, and gasoline credit cards.

The quickest way to a higher score is to pay off your credit card debt. This should be a priority if you’re looking to improve your score as quickly as possible. If you’re carrying too much debt, it’s dragging down your credit utilization, which is just a fancy way of describing how much you’re leveraging your credit card accounts. The metric compares your balances to your credit limits.

Pay off debt, it’ll lower your debt-to-limit ratio

Here’s how debt-to-limit ratio works. If you have a credit card with a $10,000 credit limit and a $5,000 balance then that card has a debt-to-limit ratio of 50 percent.  The lower the ratio, the higher your credit scores are going to be.

Scoring models consider the ratio of each card, individually. They also consider the ratio aggregated across all of your cards. It’s still calculated the same way except ALL of your balances and limits are added together before dividing the balance by the limit to yield the ratio.

Handy tool: To further help you with the basics and separating the facts from the fiction when it comes to improving your credit score, we created this handy infographic.


Ask for a credit limit increase

An alternative to simply paying down your balance to address the limits on your credit cards. Since this is just a simple math problem, you can accomplish the same score improvement by asking your credit card issuers to increase your credit limits.

Call your credit card issuers and inquire about a credit limit increase, but make it clear you don’t want them to pull your credit reports. You don’t want new inquiries to show up and possibly lower your scores. Most credit card issuers give their customer service folks some latitude regarding small credit limit increases without a full-blown credit report and score review.

Take whatever they’re willing to give you and if it’s a large enough of an increase then you may have just increased your scores without doing anything other than making a few phone calls.

Don’t max out your credit cards

Maxing out your cards makes it look like you’re financially irresponsible. In fact, as far as your credit score is concerned, you should use as little of your available credit limit as possible. Although some personal finance experts say it’s fine to use up to 30 percent of your available credit, it’s best to stay under that, if you’re looking to improve your credit score.

According to Credit Sesame credit expert John Ulzheimer, “Thirty percent is not necessarily the best percentage. If you want to earn the maximum number of credit score points, aim to keep your your credit card usage to 10 percent or less of your credit limit and your score will reap the benefits.” (This is also why it’s important to keep old accounts open even if you don’t use them. The untapped credit on those accounts only helps to lower your balance to available credit ratio.)

Don’t close credit cards

Unless you want to avoid paying a costly annual fee for a credit card you hardly use, it makes sense to keep unused credit cards open. The unused credit limit helps to maintain a lower debt-to-limit ratio.

Tip: You can also improve your credit scores by paying down some of your debt while increasing the credit limits on one or more of your cards. The combination of the two will also yield a lower debt-to-limit ratio because you’ve decreased your balances and increased your limits.

Limit the number of credit cards you apply for

Having too many credit cards can backfire on you. Every time you apply for a new card, an inquiry is made into your account to see if you’re creditworthy. With each application, your score is docked a few points. And it’s not just the inquiry that impacts your score — new account openings can also shorten your overall length of credit history, and any new balances you charge will impact your debt usage — both of which are factors that contribute to your credit score calculation.

So in order to keep your credit score from trending downward, only sign up for cards that actually work with your spending habits and avoid having more than three cards in your wallet.

Pay your bill on time

Not only does a tardy payment leave you on the hook paying a late fee and accumulated interest charges, but it also has the potential to ding your credit score substantially. That’s because making on-time payments is one of the main factors credit scoring models take into consideration when calculating your credit score.

Make sure your credit report is accurate

Sometimes there are errors made on your credit report, in which case, you need to take the proper steps, like writing a letter to the credit bureau to have it removed. Thanks to the Fair Credit Reporting Act, you can ask that the questionable transaction on your credit report be “verified.”

You would simply ask the credit bureaus to verify the accuracy of the item and if they can’t within 30 days, then they have to remove it.