Four Ways to Increase Your Credit Score by 100 Points

Are you hoping to get a better deal on your new car loan or mortgage? If so, here are five proven ways to boost your credit score by 100 or more points.

1. Reduce Balances: Credit balances affect your credit score by approximately 30%. Many people assume that making regular payments and not exceeding their credit limit helps build a high score. Wrong! It doesn't matter if you've never missed a payment, if your credit card balances are near the limit, your credit score will suffer. The best way to boost a low or average credit score is to get rid of the debt. Even if you can't payoff the credit card completely, make an effort to reduce the balances by half.

2. Never Close an Old Account: Credit history plays a huge role in credit scoring. Some people payoff credit cards and then cancel the account. If your plans are to increase your score by 100 points, this is the wrong move. In fact, closing an old account does the opposite. You'll earn a few points for paying off the balance, but you'll also lose points for closing the account. If you don't have enough self-control to keep the credit card in sight, cut the card in half.

3. Have Different Types of Accounts: Another method to help increase your score by 100 points is to obtain a mixture of different credit types. Rather than have ten different credit cards, limit your credit cards to three or four, and then obtain other forms of credit such as an installment loan, auto loan, student loan, home loan, etc. The latter four loans are not considered bad debt because the terms are usually fixed, and these loan are easier to payoff. On the other hand, credit card debt can hang around for many years.

4. Remove Late Payments: If you habitually submit late payments to your creditors, you likely have several accounts that show a past due or late account. About 35% of your credit score is based on timely payments. To increase your score by 100 points overnight, contact all your creditors and catch up on late payments. Speak with an accounts manager and ask to have late payments removed from your credit report. Because you are making an effort to improve your credit and achieve a good account standing, the creditor may be willing to cooperate with you and make the necessary adjustments.