How To Increase Your Credit Score Up To 100 Points

Are your credit applications getting turned down? Or receiving offers with very high interest rates?

Have you ever wondered why your credit score sometimes seems to be stuck in neutral? Been making your credit payments on time every month you can’t seem to get over the hump?

When I received my first credit card, I assumed that as long as I paid my credit card on time, I would have great credit. The truth is, paying your credit cards on time alone won’t cut it if you’re looking for a top notch credit score.

I am going to show you how you can make one simple change to boost your credit score by up to 100 points.

Before you can get started on the road to better credit, your first need to know where you’re starting. If you haven’t checked your credit report or score yet, click the link below to get your free credit score:

Discover Your Free Credit Score – It’s Updated Every 14 Days!

Your Credit Score Consists of Various Components

You might be wondering why making your payments on time isn’t boosting your credit score much.
Your score doesn’t increase much after on-time payments as it is only one of the components. There are 5 key components that make up your credit score.

Credit Score Components

Age of CreditCredit MixCredit Inquiries
35% 30% 15% 10% 10%

Payment History

Notice that payment history is in fact the largest component of your credit score. The strategy I am going to show you is assuming you have had perfect payment history over the last two years. If not, you score will still benefit, although the impact might be lower than if you had had perfect payment history for at least the past two years.

This is because payment history is the single greatest component of your score. Paying your credit accounts on time should be your first priority. You can still use the strategy while you work on improving your credit score for faster score gains.

Credit Utilization

This is the component where our strategy is going to come in and give us a boost. But first, let’s understand what credit utilization actually is.

When you have a revolving credit account, it has a credit limit. Most revolving accounts are either credit cards or lines of credit.

These type of credit accounts allow you to make purchases and pay over time. Every month there is a small payment due and whatever balance you don’t pay off accrues interest.

The amount of your balance that you carry over from one month to another is your credit utilization. This gets measured as a percentage of your total credit limit on your account. We can calculate our utilization % by dividing our balance by the total credit limit.

Other types of credit such as mattress and auto loans do not affect credit utilization. Opening these type of loans do improve the credit mix part of your credit score. I will cover this specific component in a future post.

For this post. we will focus on revolving credit such as credit cards.

Let’s Take A Look At An Example:

Credit Card BalanceCredit LimitUtilization %

If you have more than one credit card (which most of us do) your usage gets scored on your total usage over all cards as well.

An Example Of This Scenario:

Credit Card Balance 1Credit LimitUtilization %
Credit Card Balance 2Credit LimitUtilization %
Credit Card Balance 3Credit LimitUtilization %
Total BalancesTotal LimitsTotal Utilization %

The Target Utilization Percentage

Now that we have a better idea of how credit utilization works let’s go over our targets:

  • The greatest boost to credit scores tend to occur when total utilization is under 9% total.
  • You should only carry a balance on one card from one month to the next
  • Do not allow any card to go over 30%, even if total utilization is below 9%

The Simple Change

Now that we know:

  • The two most components of a credit score
  • How credit utilization works
  • Our utilization targets

We can focus on the one change that will lead our credit score to increase fast by as much as 100 points: the timing of credit card payments

Why Timing of Credit Card Payments Matter

Once a month, your credit cards update your credit report with the details of your accounts. Your credit score then updates based on the changes posted to your credit report. This occurs only once a month and vary between your accounts.

The most important details that post to your report are:

  • The account balance reported
  • Your credit limit
  • If the payment was on time

When you make your payments affect what details are reported on your credit report. This is because your credit report is a snap shot of your account balances at the time each one of your statements close.

This is small, but important detail is huge. It is the difference between an approval or denial for a lot of people.

Let’s Take a Look at a Scenario When Our Strategy Of Timing Our Payments Is Not Utilized:

PaydayCredit Card
Due Date
Credit Card
Statement Date
Payment Date
1st & 15th16th22nd1st

The above scenario may seem familiar. We want to be responsible, so we pay our credit card ahead of time. We don’t want to risk waiting until the 15th and risk a late payment so we do the responsible thing and pay in advance.

The problem with this approach is in the timing. Any balance accumulated between your payment and statement date posts to your credit. This is not ideal for your credit score. Correcting this habit is what will help you increase your credit score by up to 100 points!

Let’s Take a Look at What Happens Under the Above Scenario:

Balance Before PaymentBalance After PaymentSpending Since PaymentBalance on Statement DateCredit Limit

Making the payment early in this case is devastating:

  • Account holder pays off previous months balance in full
  • Account holder spends $1,300 between payment and closing date of statement
  • Statement closes when account holder’s balance is $1,300 out of a $1,500 credit limit
  • Balance and limit post to credit report showing a utilization of 87% (maxed in the credit world)
  • Score takes a nose dive

Making the change: What The Simple Change That Increases Your Credit Score 100 Points Looks Like

PaydayCredit Card
Due Date
Credit Card
Statement Date
Payment Date
1st & 15th16th22nd1st, 20th
Balance Before PaymentBalance After PaymentSpending Since PaymentBalance on Statement DateCredit Limit

In this scenario, we make two payments or more. One before the due date and one before the statement date. This way we can control the balance reported to our credit report.

This simple change makes our credit score happy. If previously your statements showed a high balance, your credit score will increase by up to a 100 points or more.

Other Strategies For Controlling The Balance Reported to Credit Bureaus

There are other changes you can make that can help you control the balance that posts to your credit report.

Option 1: Change your due date

This will allow you to shift the statement date so that it better lines up with the days you get paid. You can make this change by calling your credit card company.

Option 2: Limit Credit Card Usage

After making your payment, don’t use your credit card until your statement closes. This will make sure your balance does not creep up until after your lower balance gets reported.

Option 3: Ask For A Credit Limit Increase

Some credit card companies will allow you to increase your credit limit after 6 months. This can help you keep your utilization percentage low if you keep your usage the same. This only works if you’re limit increases but you do not increase the balance you spend.

Option 4: Open A New Credit Card

Opening new credit cards helps you lower your total utilization percentage. This is assuming that you are NOT carrying a higher balance on the new card. Check out some different credit card offers by clicking below:

On the next post, I’m going to show you some hidden perks you didn’t know your credit card had. Stay Tuned!

Disclaimer: I may receive a commission for services you sign up for, or purchases you make through links I have posted. Your purchases through links posted, allow me to support and invest time in this blog.

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