How I Raised My Credit Score by 200 Points (And Mistakes I Made Along the Way)

How I Raised My Credit Score by 200 Points
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Credit is a tricky thing. It's like surfing – you're gonna go up, and you're gonna go down. And when you go down, it feels like you're going to drown.

I hate even talking about it because everyone's situation is so different! However, I am finally (finally!) part of the “good credit” (700+) club, and wanted to share some of my tips, tricks, and ideas to get you started on increasing your credit score as well.

How I Raised My Credit Score by 200 Points

How I Raised My Credit Score by 200 Points

1. Realize a few things:

I'm not an expert by any means, and this has mostly been trial and error for me. As of two years ago, I knew very little about credit, and understood even less. I went to a “credit expert” that gave me all kinds of shitty advice. I followed it, and my score actually went down. I got fed up, started doing my own thing (which I show you how to do in this post), and my score went from the high 400s to over 700.

Improving credit takes time. Damaging it does not. What I mean by this is, you can work really hard on building your credit score for years and years, and one or two things can completely destroy it – depending on what those things are. In my experience, credit is a fragile thing and you must always be conscious of the decisions you're making and how they can affect your score.

I do not own a house (yet!), and we do not have car payments. I have heard that both of these things (a mortgage and/or car loan) can increase your credit score significantly. While we are in the process of buying our first house, we never want to have a car payment. We pay cash for everything we possibly can, which is another reason our credit sucked so bad when we started working on it.

I bought my first home in 2016 and am selling it this year (2018) due to a divorce. I'm now renting until I find the perfect house for my smaller family. :) The FASTEST way I built my credit is by using this reward credit card. You can get $150 cash back if you spend $500 in the first 3 months.

What works for me might not work for you, and vice versa. However, the tips I'm giving you here are somewhat universal and should help improve your score. Based on your current situation, do some research before jumping in, because the last thing you want to do is lower your score!

2. Sign up for a free account at creditkarma.com – yes, it's legitimately free, no they're not paying me for this post (but if you know them, send 'em my way so I can get paid, cuz it's an awesome post, yo). You do not put credit card information in. Use the “credit simulator” tool to see where your score will be (it's fairly accurate) if you open a new card, close a card, get a loan, or whatever else.

Then, get a full credit report for free at annualcreditreport.com – you can request this once per year. It's a federal regulation or rule of some sort. Don't sign up for any of their extra crap. It gets expensive.

3. Sign up for new credit card(s). This step includes three parts:

Part 1

Understand credit cards and how you should use them. The goal here is not to open a bunch of new credit card accounts and spend in a crazy way, which I'm sure you know. However, did you know that even utilizing 30% of your overall credit card limit can lower your score (or keep it from going up)?

The FASTEST way I built my credit is by using this reward credit card.

how i increased my credit score

When I was utilizing even 12% of my credit card limit, my score was stuck for a few weeks. I paid off some more balances, paid down one of my small cards, got an increase on another card, and my utilization went down to 5%. My score instantly increased 7 points according to one report, and 34 according to another! That's a huge increase.

Use your cards and pay them off monthly. Keep a low balance, if you keep one at all. Utilizing less than 10% of your credit card balance is tough, but it's ideal.

Another thing you've gotta understand: hard inquiries can and/or will hurt your credit score. I don't care how many people SWEAR to me that they won't, I've lived it. I've watched it happen to my own credit. It happens, especially when you have a low credit score. You have to weigh the good and the bad. Is it worth dropping a few points in order to go up several points in the long run? Generally speaking, yes it is.

I can't tell you how pissed off I was that my mortgage guy kept dragging his feet and dragging out my credit checks. Because he literally doesn't understand how to move quickly, he pulled my credit THREE times. The first two times, it dropped my score by about 10 points (each time!). The third time, I had already increased my score to 650, and it only lowered it by only 3 points. Don't let someone pull your credit unless it's necessary.

Part 2

Assuming you follow directions, you're already signed up for Credit Karma; so just click “My Recommendations” to get started.

how to get 700 credit score

Check for these things:

APR – You want a low APR, but that isn't usually possible with bad credit. Heck, even with “good” credit, I get offers with 24% interest. Credit cards are expensive!That means if you make a $1,000 purchase, you're paying 24% on it. Do the math. Not cool. So, do what you can to get a lower interest credit card. After you've had it for a while (say, a year, with no late payments), call and ask them to reduce your interest rate. Usually they will, even if it's just by a percent (which adds up!).

Annual Fees – Some cards charge an annual fee of $99, so watch out for that. Not only could the $99 put you over your limit (which means lowering your credit score, getting over the limit charges, etc), it could also overdraft your bank account if you have automatic payments set up (which I do/don't recommend; see below).

Approval Odds – Unless it says “good” or “very good”, I don't apply. If your best option is “fair”, then go for it (I had to at the beginning).

Member Ratings – If it has 3 stars or less, I steer clear. 4 or 5 stars? Go for it. Find out why other members rate the card(s) they way they do, and decide whether those things are important to you.

Is it a secured card? If you have terrible credit, you'll most likely have to sign up for a secured credit card. The first one I signed up for had a minimum of $200. So, I saved up $200 (which took forever), and sent it to be put on a secured credit card. This means they have my $200, until I close my card (which will lower your credit, so don't close it!). This is tough to do, especially when you're struggling financially or living paycheck to paycheck, but it truly is the first step to improving your credit score.

Part 3

Sign up for an in-store credit card. Whether it's at Sears, Kohl's, JCPenney, or wherever else, sign up for one in-store credit card to start (you can actually do this online as well). I am up to four cards now, all at places I either don't ever shop at, or can control myself at. I'd never sign up for a Wal-Mart credit card, and signing up for a Torrid card was a huge mistake because I'd drop $1,000 at Torrid without blinking. Because I have zero self-control in that store, I tore the card up after the first time I used it.

MISTAKE I MADE: I signed up for a Barclay card and bought an iMac desktop computer (best investment ever, by the way). The limit was $2,000 and the computer cost $1980. This was a big mistake. Why? Because now my credit card utilization for that card was almost 100%! Now what?

HOW I FIXED IT: At first, I couldn't afford to pay more than like $100 a month on the card. I knew I was going to get absolutely annihilated when the interest kicked in (I had free interest for 12 months), so I worked my ass off  as a Virtual Assistant to make more money. In four months, I paid the card off. This increased my score quite a bit.

4. Look over your credit report with a fine-toothed comb. If there are any inquiries on your report that you did not approve of, dispute them. If there are any negative marks, dispute them. Some suggest disputing legitimate claims if they're old, because they might just get taken off. I don't like the idea of doing that, because I feel like if I spent the money or did whatever it was to get the item on my credit, I need to take care of it not just get it taken off. However, whatever you feel comfortable with is what will work best for you.

If you decide to pay off what you owe, when you call your creditors, ask for a settlement offer. Depending on how big of a hurry you're in to increase your credit score, you might be able to play a little hard ball here. Last year, I called a medical creditor that said I owed $480. I asked for a settlement and they said absolutely not. I left it alone until a few months ago, and called them back. I asked what their best offer was. It ended up being $240. I paid it, without hesitation, because I knew that was as good as it was going to get … and I wanted to raise my credit score some more!

5. Pay off your debts. I kind of covered this in Step #4, but it's important to realize that until you pay off your debts, your credit score will only go up a little bit (if at all), and will stop at some point. If you owe $10,000 and think you can never afford to pay it off, call and set up a payment plan. Most creditors will work with you. If they won't work with you this month, try again in a few months. Ask for their “best offer”. You don't have to be bitchy, but be firm. Don't beg them and say you need this or that off your credit report – be professional but assertive.


Setting up automatic payments on credit cards: good or bad?

I say it's both. On one hand, setting up a payment for only the minimum means your payment will post in time and you won't get a ding on your credit for a late payment. On the other hand, that means you're only paying the minimum, which I never recommend.

What if none of this will work for me because I'm completely flat broke?

#1, get a job. I don't mean that in a snippy “you're a loser if you don't have a job” type of way, I mean it in the “tax refunds are freakin' awesome when you're poor” kind of way. Two reasons: tax refunds, and proof of income when buying a house. When I was working a minimum wage job and had two kids to claim, my tax refund was $5,000! That's a lot of money. Secondly, without a job you aren't getting a house!

#2, where there's a will, there's a way. If I can figure it out (remember, I was homeless not too long ago), so can you. Prioritize and make it happen. (Need to make more money? Become a Virtual Assistant.)

#3, you'll need a job or some type of income if you want to get a loan for a house, car, etc.

How long does it take?

This is different for everyone; raising my score 100+ points took only about 7 months of me actively working on my credit. However, the last 100 points were much easier than the first 100 points. So, I think it just depends on lots of things: how low your score is, your credit history age, if you have any derogatory marks, how much your credit card balances are, etc.

Is Credit Karma accurate? I heard it wasn't.

Yes and no. Credit Karma gives you scores from two of the three credit bureaus. Based on my experience, they're close to the same as what my mortgage lender told me his scores showed for myself and for Rachel while getting pre-approved for a mortgage loan. For more options to check your credit score, visit CafeCredit.com.

What if I have a bunch of derogatory marks on my credit and can't pay them off?

Bottom line is, you're going to have to pay them off or file bankruptcy. Read my tips about asking for settlements. Rachel's score was about the same as mine, but I had a judgment ($1,800) on mine. I opened a store credit card for her, made one purchase, set her card up on automatic minimum payments (it'll be paid off before the interest kicks in), and her score jumped from the low 500s to nearly 700! Just from doing one thing! I was really annoyed, of course, because I had been working on mine for months at this point and it had barely moved. I paid the judgment off, opened a few credit cards, and paid off the ones I had balances on. That's what has helped me the most.

improve credit score

Do you have questions about raising your credit score? Experiences you'd like to share? Let me know in the comments!

great tips for raising credit score
How I Raised My Credit Score
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Laurie Bennett

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  1. I love this article! You can take the most daunting task and break it down to digestible pieces. I really feel I can do this!

  2. Just a couple things I learned along the way after a few of my own hiccups in the financial world of adulting…

    I’m not typically an advocate for getting a tax refund because that means the government is using your money for FREE throughout the year instead of you having it in your pocket, in your bank account or to make payments on the bills you have, but if that is the best way for some people to save and have a little nest egg to pay off a large bill or put a down payment on something I can get behind that. On the IRS website there is a tax caculator that will let you put in some figures and come up with the best way to avoid a refund so you can use the money all year long.

    This is not the answer for everyone, but if you do have a job and have a 401(k) and find yourself in a pinch you can take a loan against your 401(k). Not ideal, but the positives are the interest rate is low and you are paying yourself back instead of a bank. So as you pay yourself back your 401(k) balance is going back up and you are paying yourself interest. Most plans allow for a loan of a portion of your vested amount. When I was getting ready to buy a business many years ago this was a good decision for me. However, keep in mind that if you leave your employment you will either have to pay it all back or it will count as an early withdrawal with taxes and penalties.

    As Sadie mentioned, pay off your cards. To build your credit it’s good to make small purchases and pay it right away with the money you would have used anyway (like if you typically would have used your debit card). You can make a few purchases each week and every Friday have a plan to go online and pay them right away. Also, if for some reason you need to make monthly payments you can set up direct payments from your checking account that would be easier for you to control than arranging it with the card / bill company directly which isn’t as easy to turn off when needed. Through my bank I can skip a payment or change the amount at any time. For things like my cell phone and car payment I have it set up to pay 1/2 of the amount 2x each month since I get paid 2x a month. It makes it easier to digest than one big payment.

    And, don’t ignore bills. If you owe a medical bill – make arrangements with the provider even if it’s $10 a month to start out. If you show good intent it goes a long way to helping you in the long run. And get the agreement in writing if you can!

    Lastly, if you make a settlement with a company to pay a portion of your bill (let’s say you owe $1,000 and can pay 50 cents on the dollar – meaning you want to pay $500 and call the bill paid in full) they can sometimes “tax” you on that and the money they write off can be considered income. So keep that in mind at tax time and be sure to check into it before filling your taxes and getting in trouble.

  3. I’ve always been told that if you have bad debt you can’t pay that’s making a negative impact on your credit score, that if you start paying on it, it’ll make the time it’s on your credit report start over, so how do I pay it and get it OFF?

  4. Staci, that depends on how much the debt is, etc. If it’s something you can pay off, then pay it off and it will be removed. If it’s something you can’t pay off, dispute it. If it doesn’t come off, call them and offer a settlement. Usually 50% of what the debt is, is reasonable and will be accepted. Once you’ve paid it off, it should be off within the next 30 days. If it’s not, call them and have them take it off.

  5. Great post Sadie! Thanks for all of the tips. I have a question in regard to having a job before buying a house. How much work history is needed? I have been a SAHM for several years and I am about to go back to work. I am just curious how long I need to have income before applying for a mortgage. Can you help?

  6. Great post-very informational! But I have a question, I were you able to open up all those credit cards with such a low credit score? I have tried to open up an Old Navy credit card with a score 646 and was declined. You mentioned you had a Barclay card with $2000 credit line, how did that happen? Just curious!

    1. TeeT, if you go to Credit Karma they have card suggestions for your exact needs. I started with a secured card (I paid $200 to have a $200 credit line).

  7. back then in 09′,when i wanted to get a house for my family because i wanted a bigger space for my kids they were always complaining they wanted separate rooms, but i couldn’t get a loan because i had a poor score, then i started dropping my contact on different blogs and site, so i met some guy who mailed me saying he could help me raise my score to 780,and that was good for me… i didn’t believe him at first but i decided to try him out to my surprise he helped me raise my score and cleared my report now i have a bigggg house! !… honestly i have never seen the kids more happier in their lives I made their dreams come through ‘I’M THEIR SUPER MAN’????thanks to him…i think you guys should try him out via cagedpeter at fastservice dot com

  8. Awesome post!! I used part of my 401K to pay off every debt that I owe, except my car payment. I have a self lender account and have 2 secured credit cards. I am just waiting on my score to go up now…

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