Increase Credit Scores – 2 Tips to Increase Credit Scores Fast

Today, every major purchasing decision that involves seeking credit of any type, such as for a home or car, is a credit-based decision. The lender will look at the person’s credit history and assess whether the creditworthiness makes that person a good candidate for the loan. Even employers look at credit scores these days. Personally, I don’t think there’s a huge relationship between spending habits and job performance, but employers and other lending companies use this tool for the same purpose – risk reduction.

Now that you understand the importance of being aware of your credit history. It is all the more important to take the necessary steps increase your credit rating as much and as fast as possible:

1) Don’t keep non-mortgage debt under 10% of lines of credit

This is probably the hardest step to get those peaks in the 800+ range. In the past I’ve had a score in the early 700’s. I had the usual credit profile of a mortgage, credit card debt, and some other forms of debt (eg, auto loans and home equity line of credit). After a while I paid off all my debts except for the mortgage. How do you think this has affected my credit score? In about a month of paying off all the debt, my score was an average of 800 from the 3 credit bureaus. It is not always possible to pay off your entire debt. As long as you keep your debt at less than 10% of your total credit limit, your results will benefit greatly.

2) Take out a loan (aka piggyback)

This was a popular technique a few years ago. When I mentioned this to some people recently, they said they’d never heard of it. This strategy is very easy to implement. To do this, you need the help of a family member or friend who has excellent credit and who trusts you. So what are you doing? You ask them to add you as an authorized user to one of their oldest credit cards or accounts. The ideal number for this strategy is two or three accounts. Why does this work? When you are added to someone else’s credit account, you essentially inherit their credit history as well. That works wonders for Increase your creditworthiness and it works fast (within 30-60 days).

There are a number of other tips and tricks you can use to increase your credit score.