Raise Your Credit Score 30-120 Points In 30 Minutes!

It is important to understand how the three major credit bureaus, Equifax, Experian, and Transunion calculate your credit scores. This is not something that a lot of people know, and I am sure you have never been taught this information.

To explain what makes up your credit score in as simple terms possible, this is how it works

Your Payment History (35%) Makes up the largest factor in determining your score. This is a picture of how you pay your bills.

Credit Utilization 30%: This is the percentage of available credit used. We want to keep our balances below 50% of the limit ideally. This is where we will find the most room for improvement in most cases.

History 15%: This is how long our accounts have been established. A more established account has more value than a new one.

Credit Inquiries 15%: Whenever you apply for credit, an inquiry is registered on your credit reports. If you get too many, it can have a negative effect.

Type of Credit In Use 10%: Type of accounts, and number in use. Mortgage loans are the best, and finance company accounts are the worst.

Since we now have an understanding of how scores are calculated, now we can focus on a couple of things we can do right now to maximize our scores.

Raise your limits! Raising your credit limits is much easier than you might think. Most people don't realize that just by simply asking for a credit limit increase, you will most likely get one. We have proven this over and over again with clients. Just call the phone number on the back of your credit cards, and tell them you are considering transferring the balance to another card with a higher limit and lower interest rate, but that you would like to keep the account if they could just raise the credit limit. In my personal experience, it has worked 100% of the time. Often they will also lower the interest rate as a bonus. Lowering the interest rate will not help your credit score, but it will sure help your finances.

Let's say for example you have a credit card with a $5,000 credit limit, and you currently have a $4,000 balance on it (80% utilized). After your quick phone call, they agree to raise your credit limit to $6,500 (now 62% utilized). This alone will immediately increase your credit scores. Remember in the "Credit Utilization" section above, we want to ideally keep our balances below 50% of the credit limit. This brings us to the next powerful tip.

Lower Your Balances! Continuing from the example above, you are now 62% utilized on your credit card. This means you still have some room to further maximize your scores. If you pay $750 on this credit card, you will bring the balance down to 50% of the new credit limit ($3,250 balance on $6,500 credit limit). Now, you might be saying that you don't have $750 to pay down your credit card. That's ok, you could stop here, you have already increased your scores, and you can get the limit raised for all your credit card accounts. However, if you are trying to buy a home, or even a car, you can potentially save thousands in interest on your new loan and get a lower monthly payment, just by paying a little down on your current accounts. When that results in higher credit scores, you may qualify for much better loan terms.

Both these techniques are fast and easy, and have been proven to work time an time again. I have used them personally, as well as assisted clients with them. I am confident they will also work for you.

These simple tactics are more appropriate for someone with a good payment history on established credit card accounts. It is recommended that you have at least 3 open credit card accounts to maximize your scores. One of these could be a department store account. If you don't have enough credit, or have a negative credit history, perhaps more aggressive credit repair or credit building strategies would be more appropriate for you.

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Jon Ochs has worked in the credit and debt industry for over 12 years and is the founder/CEO of NCA Credit Repair. You can learn more about establishing new good credit at Credit Learning Center.

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