I raised my credit score from 680 to 811 in two years. Here’s how I did it.
Having a good credit score makes borrowing much more affordable. Unfortunately, my credit score was just 680 when I graduated from college. There were a few reasons for that:
- My credit history was pretty short.
- I’d closed accounts without knowing better, so my credit utilization ratio wasn’t great.
- I owed a whole lot on student loans but didn’t have many other types of credit.
While 680 isn’t a terrible credit score, it isn’t great, either. Fortunately, within two years, I was able to work hard to get my credit score to 811. This increase in my credit score was made possible by careful borrowing behavior and by understanding how credit scores are calculated.
Here are four steps I took to change my credit score from average to excellent.
1. I slowly took on new kinds of debt
Having different kinds of credit is important. While I started with just student loans and a few open credit cards, I applied for other types of debt after graduation. This included a car loan, which I quickly paid off, and a mortgage for a new home.
I didn’t apply for too much new credit at one time, as each application comes with a hard inquiry. This can hurt your credit. But I did apply for new loans several times over the course of that two-year period. Those loans diversified my credit history.
2. I asked for credit line increases all the time
Your credit utilization ratio -- or the amount of available credit you’ve used relative to what’s available -- is a key factor in determining your credit score. The lower the utilization ratio, the better your score will be.
To ensure that I always had lots of available credit, I diligently raised my credit card limits. I did this by requesting a credit line increase every time I had the option to do so without a hard credit inquiry.
Most credit card companies occasionally give you the option to request a credit line increase from your online account. This option is usually listed under Account Services or Tools. Every couple weeks I’d check to see if this option was available -- and I’d request an increase as soon as it was. I was never turned down and I now have large credit lines on all my open cards.
3. I worked on paying off what I owed ASAP
I was also able to dramatically improve my credit by paying my bills on time each month to develop a positive payment history. Aggressively paying down outstanding debt balances also helped. By paying off my credit cards and car loan and reducing my student loans, I reduced my credit risk and my score went up.
4. I was named as an authorized user on some old accounts
Another way I increased my credit score: I got married and my husband added me as an authorized user to some of his oldest credit card accounts. This made my credit history look longer and I got the benefit of his long payment history on my credit report.
My husband is five years older than me, had some accounts he’d opened when he was young, and always paid on time. This was a major benefit, because length of credit history is an important factor in determining your credit score.
How you can raise your credit score
Some of these steps, such as asking for credit line increases and paying down debt, are steps that anyone can take. Others -- like getting added as an authorized user -- aren’t possible for everyone. But if you have a willing friend or family member who will add you to their account, it can be a good way to help you boost your credit.
Still, if you pay off debt, keep old cards open, and be careful about taking on new kinds of credit, you can boost your credit score over time. And soon, you’ll qualify for the most favorable rates.