Today I want to walk you through every step of the process that I used to help my wife take her credit score from 613 to 774 in 30 days. We’re going to cover my top tips and tricks to get that score up immediately and keep it up so you can get approved for that next loan. I’m 29 years old and over the last 6 years I’ve accumulated over 100 doors of rental real estate. It was only possible because I figured out how to get my credit score up and keep it there. Let’s talk about how to improve your credit score in 30 days or less.
Last year my wife decided she wanted to get into her first investment property. I was limited on the number of loans that I could get, so it was a good time to do it. You can only get 10 personal loans. I have done business loans, which I won’t get into here, but my 10 personal loans were used up. For us as a family to buy more real estate, my wife needed to be able to use her personal loans and her credit.
She hadn’t put any effort into building credit in her past, so when we looked at MyFICO, she had literally no credit. She had not had credit cards, no credit history, nothing. We went into Polar Credit for the first time, and found that her score was a 613. This is not a terrible score, but it’s not what you’d need to get approved for a loan. Luckily for my wife, I am very good at helping people increase their credit scores. In the course of one month, we made certain moves to get her 613 to a 774 so she could not only get approved for a loan, but get approved with the best rates on her loan for the first investment property that she purchased.
So let’s get into what we did to bump it up that quickly and what you can do to quickly boost your credit score in a 30-day period and maintain that high credit score. We used a little trick to get my wife’s credit up in less than 30 days. This little trick is called “becoming an authorized user.” The key with this is finding someone with a good credit score who will let you be an authorized user on their account. I already had a credit score over 800. When we went in and made my wife an authorized user on two of my credit cards, her credit score immediately improved. We knew when the bureaus reported, and she applied for the personal loan as soon as we knew the bureaus had reported her score. That’s when her score came back as a 774.
Not everyone will be able to do this because it requires the trust of someone with a good credit score. If you make someone an authorized user on your account, you are essentially vouching for them with your credit. If your authorized user were to do something irresponsible with that credit card, it would hurt your credit too. Luckily for me I trust my wife, and this was a perfect way to jump her credit score.
Even if you don’t have the ability to increase your credit score with the authorized user trick, you can still take advantage of these 6 ways to boost your credit score in a 30 day period. If you do become an authorized user, these tips and tricks will still be important to keep your credit score high.
The first thing you need to understand is how credit scores are calculated. This chart shows how they come up with your credit score:
Just knowing this breakdown will have a huge impact on the moves you make to build credit to a good score. I use MyFICO.com to track my credit score and see how it’s affected. It also gives you tips and tricks to increase your credit score.
Start building credit history by getting some credit cards. You need to have at least 3 - 4 lines of credit (credit cards) at all times. I suggest Wells Fargo, Chase, or Bank of America. These are Tier 1 banks; you can tell them you have no credit history and ask which credit cards they have that you can get approved on. You just want to get approved so you can start building a credit history. Tier 1 banks are going to be a lot better for you than any other random credit card. If you do your research on what you need, you will be able to get approved. This prevents you from applying for something and getting denied, which can damage your credit further. The other reason to go for a card from a Tier 1 bank is that certain cards have more power to up your score than others. For example, a Home Depot card is not going to help your credit score nearly as much as a card from one of these Tier 1 banks.
In addition to having a few credit cards, you also want to have some other types of credit. A healthy credit mix will also include a car loan and a home loan to build those other aspects of your score. If you already have a home loan and you’re building payment history, that will give you a better score when lenders of homes are looking at your credit. You can build a good credit score just from credit cards, but the more variety you have, the stronger and more stable your credit score will become.
Less New Credit
Once you’ve got some credit cards, you need to rein it in and get less new credit. I know this sounds like a contradiction but hear me out. You need to get credit as soon as you can. If you’re young, go and get credit right now. You need time to build credit history. Usually your credit will jump every 3 months so you’ve got to start building that history. If you’ve had multiple credit cards for 3 or 4 years, it’s going to be easy to get approved for other loans or cards because you’ve built that history and score. But you want to be careful about applying for new credit if it’s not essential. You only want to get new credit if you’re starting to build your score with credit cards or if you actually need it. Otherwise, any new credit is going to bump your score down slightly.
Your credit history will only be as good as your payment history. This means you need to make your credit card, car loan, and home loan payments on time. Being late will negatively affect your credit. For credit cards, pay off the balance to $0 every single month. If you have to leave money on your credit card in a month, at least make sure you are paying the minimum on time. But the goal and best practice is to pay it down to a $0 balance every time.
Credit Card Utilization
You want to stay under 10% utilization of your credit card. This means that if you have a credit card that has a $1,000 credit limit, you can’t put more than $100 on it.
The chart below, from Ask Sebby on YouTube, shows how the more utilization you have, the worse off you are:
Even if you are just doing a high utilization for one month and then keeping it low, your score will still look at what your highest utilization was. For example, if you’re using $900 on a card with a $1,000 limit, it’s always going to remember that you once used 90% of your utilization of that card. So make sure that you keep it under 10% at all times. Don’t panic if you’ve used say $3,000 on a $3,000 limit card in the past. Just make sure that you don’t use above 10% going forward. Also, call your bank and ask them to raise your credit limit. If you can raise your credit limit from $3,000 to $8,000 or $10,000, now your highest utilization will be around 30% instead of the 100% that it was before. It will ding your credit score initially, but it will immediately bounce back up because your utilization has gone down. This will also give you more freedom with your 10%. So instead of $300, your 10% will be $1,000 that you can use. You still want to make sure you are using these credit cards every month. So from now on make sure you are keeping at 9% utilization or below to maximize your credit score.
When you have someone pull your credit to check your score, you want to make sure they are pulling it at the exact time when you have your best score. Each of your credit cards or any loans, have a certain time when they report to the credit bureau. Call your credit card companies and lenders, and ask them when they report to the credit bureau. You want to make sure that all debts that can be paid off are paid off right before they report to the credit bureau. When they pull it, it will show that all your cards and debts have been paid down to zero. This will bump your score right when you need it bumped the most for when you’re getting that credit pulled to get approval for that next loan.
These six tips will have you well on your way to achieving and maintaining a great credit score. In future articles, I will continue to provide you with hints and tips and tricks to be able to raise your credit score. If you are looking at raising your credit score in order to purchase an investment property, look around my site and my other articles to get more helpful info about that process.