How I Increased My Credit Score From 588 to 690 (6 Steps)
It took me a while (10 months to be exact) to get my credit score to where I’m at right now at 690. Still ways to go but its getting there. Below, I will show you how I’ve increased 100+ points on my credit score in 6 steps.
By CondorHero
1.Take Care of Collections ASAP On Credit Profile
Before I started getting more into the credit game, my credit score was at 580 which was the end of 2020. I didn’t have any collections at the time on my account according to credit karma. I did have some before (unpaid credit cards & repossession auto loan), it was either remove because of the 7 year cycle or I paid it off long ago. While I was doing research, the most important common topic I’ve come across on how to improve credit score was to remove collections. Removing your collections from your account can have a big impact on improving your credit score. Whether paying it off or letting it ride out of the 7 year cycle or you can try and file a dispute against the collection, removing it from your credit report is a priority.
2. Pay Off All Credit Card Debt
When you know there are a lot of possibilities when having excellent credit, one the best feeling is seeing your credit score goes up after paying off all your credit card. Its a sigh of relief and a big accomplishment. It took me 6 to 7 months but it was well worth it. I have a salary good enough just to get by with all the bills I have. Paying it off little by little goes a long way! I know there are some of you guys can pay it off faster than 7-8, just do it. There are endless opportunities waiting. For others that are in the same situation that I was at, the most important keys for me was: budgeting, on-time payments, discipline, & patience.
Side Note: If you don’t have any credit cards, I suggest you apply for a secured credit card. It is one of the easiest ways to get started. Another way is to get approve for a low to no annual fee unsecure credit card. Then go on to the next step.
3. Keep Utilization Rate At 30% Or Below Will Help With Credit Score
Did you know that credit utilization have a high impact on your score? Keeping your utilization rate at 30% or below is another very important key factor for a better score. The lower the rate the better it is for your credit profile. But keep in mind, if your utilization rate is at 0%, the credit bureaus will think that you are not utilizing your credit and that might not help your credit score. I try to keep mines at around 10%. As long as its below 30 your golden!
4. Replace Debit Card With Increased Credit Card Usage
Yes, you read that right. When you go out shopping for groceries, use your credit card. Car insurance? Phone bill? Netflix? Etc.. Put it on your credit card. Use your credit card how you would with your debit. Also, do not use your credit card for anything you don’t have money for. Credit card is not extra cash you have, it is cash you are borrowing possibly with interest (more about interest in step 5). On the bright side, by replacing your debit card with your credit will keep your utilization rate above 0% and creditors love that. Another upside to this is some cards even give you cash back or rewards. I will get into more details about those cards in a future post, so stay tuned for it.
5. Pay Your Bill On Time (No Late Payments on Credit Profile)
Payment history plays huge role in your credit report. Paying your bill on time will not only raise your credit score it also means you don’t have to pay interest on the money you borrowed using your credit card. Plus you wouldn’t want to pay those hefty late fees. Any missed payments can bring your score down significantly. So if step 4 is followed, there would be no problem paying your bill on time before the due date. There is another date that you should know about and it’s called the statement date. When a statement date closes that is when the creditor reports to the credit bureaus.
More on credit card dates: Credit Card Statement Date And Due Date
6. Repeat (Credit Score Increased)
Now that you’ve went through steps 1 to 5, you should see an increase in your credit score. Repeat this process on a monthly basis will get you on the right track.
Be Consistent!
Summary
That is how I increased my credit score from 588 to 690. Important key factors: Be patience, be disciplined, and budgeting. Keeping track of all your expenses and credit cards. I hope you enjoyed this article. And if you want to learn more, please stay tune for my future posts. Thank you for your time, much appreciated.
Check out CondorHero Youtube Channel!