How to Raise Credit Score by 200 Points

A high FICO score is crucial for your financial health. It makes credit cards and loans more accessible and unlocks lower interest rates. Having the perfect total is not easy. It may be tarnished by mistakes on your reports, or your own reckless behavior like missing payments and applying for multiple loans at once. Here’s everything you need to know to boost your score by 200 points.

Consumers should monitor their credit histories. Today, you may find your score through apps like Credit Karma or request a free copy of records from each of the major bureaus. Note that different lenders have different criteria to tell desirable borrowers from rescue ones. For example, loans insured by the government require a lower score. Still, if you need to boost your total substantially, here is what to do.

Step 1. Check Your Records

It is not uncommon for credit reports to be flawed. Unfortunately, data stored by credit bureaus may contain false entries. For instance, you may discover foreclosures, judgments, evictions, bankruptcies that never happened. In this case, you should collect evidence and dispute the items by communicating with reporting agencies.

This is not easy, which is why legal credit repair services are so popular. For a monthly fee, a team of experts will pour over your records, spot any debatable items and collect proof and liaise with agencies, banks, and collectors. When an item is deleted, the score rises automatically.

The company will tell you if you have a sufficient score for your needs, e.g., credit score to buy a house, and if you may expect a boost by 200 points or less. If it is achievable (although results are never guaranteed), this scenario is the easiest — it does not require any actions on your part. You may delegate all the tasks, or ask the experts to guide you if you are willing to open disputes by yourself.

Step 2. Understand the Criteria

So, what should you do if your records are in order? This is not uncommon. According to Experian, over a quarter of all borrowers have inadequate ratings. To enhance their FICO scores, they should understand how these are calculated, and what aspects of their financial behavior need improvement.

At the moment, lenders may use different models for application assessment. Most commonly, aside from your history of payments, they look at the type of credit products you have used, the length of history overall, credit utilization, the size of existing debt, and any new applications.

Raise Your Credit Score

If the poor score is legit, there is no way to repair it. All you can do is rebuild it by working on your spending and budgeting. Some repair companies give access to a special credit line for this purpose. Here are a few tips to help you boost your score by 200:

1.   Never Miss Payments

Even a single late payment may have more serious consequences than you think. Lenders report any delay over 30 days to bureaus. Information about missed or overdue payments stays on your records for up to 7 years. Thus, if you are simply forgetful, set reminders or set up automatic payments, so you never fall behind again.

If you are unable to meet your obligations due to force majeure, contact the creditor. Negotiate a delay or restructuring. Whatever happens, communication is crucial. Do not just wait for the score to collapse and collectors to start harassing you.

2.   Work on Your Budgeting

There are plenty of smartphone apps to help you with this. Keep track of your income and expenses (both regular and occasional) to make sure you can pay all bills on time.

The less you owe — the better for your records. When the so-called credit utilization ratio is high, it means that you are using a significant portion of all accessible limits. For example, when consumers max out their credit cards, their FICO scores go down. Thus, try to pay off your debts more quickly and minimize the balance on all credit cards.

Alternatively, you could increase your limits. This way, more funds become available. For instance, suppose you have access to $10,000, and the balance is $1,000 (10% rate). If the lender doubles the limit, your balance will constitute half of the previous percentage (5%). This indicator should not rise over 30%, while 10% is a good target.

Minimization does not mean you should cancel all the cards, even unused ones. Leave them open to ensure more available credit. You could also consolidate several accounts or use a personal loan with lower interest to pay them off.

3.   Limit Hard Inquiries

Whenever you submit an application, the creditor checks your records in bureaus, which leaves hard inquiries on the reports. Several of these entries over a brief period of time is a red flag and the cause of score decreases.

The Bottom Line

It is not easy to improve a credit score by 200 points. This doesn’t happen overnight. However, it is not impossible either. Check your reports and dispute any errors. At the same time, work on your budgeting and manage your existing debts. If your records detail years of missed payments, the score will take a long time to remedy.

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