When I was in my mid-20s, my friends used to casually number drop their credit scores over brunch. It always made me cringe.
I’d hear people throw out numbers like 820, 805, 795 — big numbers that lenders view as “exceptional” or “very good” FICO scores.
My score (in the high 600s), on the other hand, was nothing to brag about. In fact, I began to wonder if I would one day come to regret maintaining the mediocre score when it came to applying for a mortgage or personal loan.
I set up a challenge for myself: I vowed to spend an entire year doing everything I could to improve my credit in hopes of boosting my score by 100 points. In the end I succeeded, but it wasn’t as easy as I had expected.
Here are the tips and tricks I followed to achieve my goal:
1. I educated myself on all things credit
The truth is, many of us don’t know enough about our credit scores. According to a survey conducted by Lexington Law, 54 percent of Americans say they never check their credit scores. It’s a number we might go years without thinking about unless we need something like a car, house or loan. So to jumpstart the process of improving my score, I decided to educate myself about credit scores.
I started off spending 30 minutes each week reading informational articles on what a credit score is, how it’s compiled and what makes it go up and down. I also focused on things to watch out for, mainly to avoid doing anything unnecessary to bring down my score. Three months into my self-taught crash-course, I knew more about credit scores than most people around me.
2. I kept a closer eye on my credit card balances
My poor credit card management was hurting my credit more than I knew. In addition to late payments, my credit utilization ratio was high and I had closed cards for no reason — all habits that negatively affected my score.
In order to improve my credit score, I immediately made sure that I set up autopay for my credit cards and put a monthly reminder in my phone, so that I could double check my balances were paid on time moving forward. Recurring on-time payments can make your score climb fast.
Another thing I learned during this process is that you can boost your credit score by paying down your balances.
Mike Pearson, founder of Credit Takeoff, says the credit bureaus generally like to see your credit utilization ratio at 30 percent or lower. That means if you have a $10,000 line of credit on your cards, you want to keep the balances at $3,000 or lower. If your balances grow too high and you pay them down quickly, however, you can see a huge boost in your credit score almost immediately, Pearson says.
Since I knew that I couldn’t always make a more sizable payment to trim my balance, another strategy Pearson suggested to improve scores was to contact the credit card company and ask for a credit line increase.
“If you’ve been paying your credit card on time, then your credit card company should be open to giving you a credit line increase,” Pearson says. “This is another way of getting your credit utilization below 30 percent. But instead of paying down your balances, you’re just expanding your available credit.”
3. I filed fewer credit applications
It’s hard to boost credit scores when you’re applying for a lot of credit in a short period of time. A no-no I was guilty of in the past.
Within one year, I applied for three credit cards, a loan and submitted applications for two different leases on apartments. All of those credit requests put pressure on my score, especially since they all occurred within a few short months.
David Gafford, the co-founder of Shift Processing, a credit card processing company, recommends doing the opposite of what I did.
“Avoid opening new lines of credit during the time period that you’re focusing on improving your credit score,” says Gafford. “With each new line of credit that is applied for, a hard pull of your credit occurs, which lowers your credit score by a few points. New lines of credit can also throw off your credit usage percentage, so to achieve 100 points in a year, it’s important to hold off on new lines of credit.”
In the year I improved my credit score, I only filled out one credit card application in January and waited seven months before applying for a new lease. That allowed my score to settle down.
4. I stopped closing credit cards
When I started this credit score improvement process, I mistakenly thought the first thing I should do was close credit cards that I no longer used. But early on, during my research phase, I learned that this was the totally wrong thing to do.
Lauren Anastasio, a financial planner at SoFi, suggests using caution when considering closing accounts you no longer use.
“If you’ve had a card for a long time and there’s no annual fee, consider keeping it open even if you don’t use it anymore,” says Anastasio. “Closing cards can increase your utilization rate by lowering your overall available credit as well as shorten your average length of credit history, another component of your credit score.”
Putting those four strategies into motion helped me raise my score significantly in just a year. It was also the start of my adventure to always keep my credit score as high as possible — and top of my mind — even when I didn’t have a true reason to need it.