How Can I Raise My Credit Score by 200 Points?

How Can I Raise My Credit Score by 200 Points?

Is it time you repair your credit score? Perhaps you’re wanting to be accepted for a personal loan, but you realize you’ll need to increase your credit scoring by around 200 points to do so?

Your situation will depend on what exactly you’re trying to achieve, as the credit rating requirement changes according to your particular needs. You might need a personal loan, perhaps a car loan, or maybe a mortgage for your home. So your target will really be based on want you’re trying to find acceptance for.

Generally speaking, a credit score will range from 300 to around 850 points. It goes without saying that you’d probably need a minimum credit rating of around 600 points in order to be accepted for a car loan. This isn’t necessarily always the case, and different loan providers and loan companies offer varying loan requirements and a variety of score ratings. The chances are, however, that your credit scoring will need to undergo a bit of a credit repair in order to be approved for the loan you’re trying to obtain. And it’s fairly obvious that if you don’t satisfy the lender’s minimum score requirement, you simply won’t get the loan you’re seeking. 

 

Is There a Lender out there Who Will Accept Me with a Lower Rating?

 

 

But don’t despair – there is a chance that you’ll find a lender who may approve your loan even with a credit rating as low as 550. But this situation often isn’t a one-way street, and usually comes at a cost to you. For example, if the interest rate on, say, a new car loan is around 4.5% (this will change according to the number of years you wish to take the loan out for), and the interest rate for a second-hand vehicle is approximately 8%, if you’ve got a low credit score and you haven’t taken the time to repair your credit, the interest rate you’ll be offered will be around the 12.5% and 18% mark accordingly.

When you’re buying a home, the majority of the lender companies out there will expect you to knock on their door with a credit score of at least 550 or 600. That said, if you apply for a Federal Housing Administration loan, there is a chance that you’ll probably get accepted with a score of approximately 580. The downside of this is that if you’re accepted you’ll then be expected to provide a 3.5% down payment as opposed to the usual 3%.

So let’s make no bones about it – you really will save money if you are able to perform a credit repair and raise your credit score sufficiently before you apply to make a large purchase. If your credit rating is poor, increasing your credit score by 100 points won’t usually cut the mustard, so you’ll be looking to get it hiked up by at least 200 or so points more. 

 

How Do I Know What My Credit Score Actually Is?

 

 

Of course, you can’t exactly repair your credit and increase your credit score if you don’t know what your credit score is at the moment. People often have a rough idea, if, for example, you’ve not made some payments or you’ve been late paying them. However, it really will pay to get a copy of your personal credit report before you go any further. This credit report will usually provide you with details about any payments, debts, loans or accounts you’ve potentially forgotten about. 

The other situation to consider is if you were previously married or held accounts in joint names, as you’ll often be shocked to discover that there are items on your report about transactions or payments that you yourself never even carried out.

We have to know what the problem is before we can correct it, right? So get hold of your credit report and then you can start to address the issue. The other thing to remember is that if you find any errors on your credit report, you can have them corrected. The Federal Trade Commission can provide you with information on how to go about correcting your credit report. So you can make a start by enquiring with, say, Equifax, Experian or TransUnion, and informing them of the mistake on your credit report. They may require documentation as evidence or to back up what you’re saying. Once they’re satisfied that there is an error, they will set about investigating the situation for you.

It does take time to have such an error remedied. And there’s nothing to say that you’ll get the positive outcome you’re looking for. But at least you’ve made the effort to have the situation sorted out, and it’s that first crucial step towards carrying out that much needed credit repair. If a creditor or account is not prepared to rectify or remove the report in question, you can then ask the reporting agency (Experian, Equifax or TransUnion) to add a note to your credit report which explains that you are not in agreement with this particular entry. At least then you have information on your report to explain that not everything is at it seems, even if the respective creditor is not prepared to help you out. Although this won’t increase your credit score, any prospective lender will read the added note, and they could be swayed into accepting your lower scoring using the potential inaccuracy of your credit report as a foundation for that decision.

So it pays to keep an eye on your credit score. It certainly isn’t easy to raise your credit score by 200 points, but you know, it really can be achieved.

 

How Do I Start to Perform Credit Repair and Raise My Score?

 

So, you’ve familiarized yourself with your credit score. You’ve possibly had a few nasty surprises, and now you really do need to get on with repairing that credit.

The first thing to consider and actually do is to pay off some balances on accounts. If you’ve got debts that are listed on your credit report, it makes sense to rank the outstanding debts and favor the ones that will be deleted from your credit report if you were to pay them off. It really does pay to communicate with each of your creditors and then ask them if they will take your debt off your credit report if you pay off the debt in full. Not every creditor will cooperate, but some will be happy to remove the bad debt from your credit rating if you’re prepared to pay it off in full then and there.

Paying off a debt won’t necessarily remove the information about any late payments you’ve made in your payment history. You will of course have to pay off all your debts in the end. The only way this wouldn’t be the case is if you declared yourself bankrupt … this would then completely remove your current credit score. That said, this action won’t necessarily always repair your credit or raise your credit scoring. So if you are trying to achieve an increase of 200+ in your credit score, you will definitely need to pay the creditors who are prepared to remove your bad debt from your report first of all.

 

What About My Credit Card Balances?

Once you’ve done all this, the next step on your road to raising your credit score by 200 points is to pay off any credit card balances you may have. The level of your balance really will have an impact on your credit score. Your ratio of debt compared to income will definitely affect your ability to be accepted for a loan of any kind.

By way of example, if you have a number of credit cards and you’ve used up the limits on some of them, you should really work out what your utilization rate is. To do this, divide the credit card balance by the credit limit (i.e. enter the credit card balance, press the “divide by” button and then add the credit limit and press the “equal” button). Don’t delete the entry yet, as you will then need to multiply the result by 100. So you press “multiply” and then enter 100. You then press the “equal” button to see the result. This figure is considered to be your utilization as a percentage. 

Credit rating agencies will often state that your utilization rate should be no greater than 30%. Less, of course, would be much better. If you have a higher rate of utilization, then this could mean that:

  • You may either not be earning sufficient money in order to pay your debts 
  • You are not responsible with money
  • You’ve basically got your finances out of control
  • You’ve made some very poor decisions regarding your finances

Lenders really won’t care about the reasons or situation you were in which caused you to get into this pickle. It’s all about how it looks on paper. And the sooner you get the credit repaired or you’ve paid off your balances and bad debts, the better off you will be and your credit score will be increased accordingly.

 

A Secured Credit Card Can Hoist Your Score Up By 200 Points

 

Not all of us have the wherewithal to rip up our credit cards when we’re having financial issues. It’s great if you can, but eradicating credit cards from your life can be a really difficult thing to do. Notwithstanding how tricky it can then be if you don’t have the ability to order things on the Internet that you can’t access in stores. Even renting cars or reserving tickets or rooms in hotels could be awkward without a credit card.

However, even if you’ve managed to remedy the situation that got you into this state, it could then be tricky to find a bank that is happy to provide you with a credit card. They’ll take one look at your credit history and potentially refuse. So you should probably consider getting a secured credit card. This allows you to put funds in escrow to then assure your purchases. So, for example, you can request a §1000 secured credit card. Upon approval, you then provide the bank with §1000 to guarantee that the bank will get paid if you exceed your credit limit and are unable to make the necessary ongoing payments. If you haven’t got §1000 to put up, then maybe you can ask a relative to be a co-signatory. This means that they will guarantee to pay the bill if you can’t or don’t. 

 

What Else Can I Do To Repair My Credit Score?

 

Inquiries on your credit score can be really bad for its health. Each time you apply for a loan or credit, the lender in question will scrutinize your report. This check they carry out then goes on your report. So the issue is, if you’ve applied for a number of loans and these have been denied or even approved, it would appear to future lenders that you are really anxious to buy more things that you simply cannot afford.

That said, a lender or store does have to obtain your approval in order to carry out a credit check. If they have not done so, you can request that this inquiry is removed from your credit report. It’s important, however, that you make sure you get the most damaging or serious ones removed first, as not all inquiries are necessarily “bad”.

So, in the future, ensure you pay your utility bills or any other health bills on time every time. It makes sense to have these automated on direct debit.

 

Takeaways

In theory, you could manage to increase your score by 200 points within a few months. It really depends on how quickly you can implement all these remedies. But you can at least now see that it is possible to carry out a credit repair – it really can be done! Contact us today to find out how.

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