Welcome, my name is Ciara. It’s always fascinated me how money and finance and credit works. I do have a Masters of Business Administration, and I also work full time as a mortgage loan officer. I do have some experience in the areas of finance and credit. Today I want to share with you guys a credit score hack. Most people know what a credit score is but understanding how your credit score works is crucial to making this work.
How Credit Score is Derived
Your credit score is anywhere from 350 to 850.
- 35% of it is payment history
- 30 percent of your score is “amounts owed”
- 15% of your credit score is your length of credit
- 10% is what your actual credit mix is in
- 10% is the amount of a new credit that you have
Don’t worry too much about these numbers. Just to know that your credit score is mostly your payment history and how much you owe on those. The first step is to check your credit. You can get one free report every year on annualcreditreport.com. You just need to know what accounts are on your credit.
The way that you’re going to boost your score is by tricking the system, so to speak. One really important thing to know is what kind of credit you have, whether that’s revolving or installment. Revolving credit that revolves like a revolving door. Your credit cards and your retail cards, things like that. Credit where the balance changes and it goes up and down.
Installment payments are like your student loan payments, car payments, personal loan payments that are fixed for a certain amount of time. Your credit report will list all of your revolving and all of your installment debt. Focus mostly on your revolving credit. That is what is going to affect your score the most. Paying off installment loans is really not going to help your score that much. It’s the revolving debt that affects you the most. This means focus on your credit cards and charge card. Focus on the utilization of these revolving accounts. They affect your score the most.
Leave a Little Remaining Balance On Your Cards
These are mostly what we’re going to attack in order to jump your credit score up really fast. Pay down or off your lowest balance. The second thing you want to do is pay down the card that has the highest utilization. One major hack, and one thing I learned working in the mortgage industry, is that you never pay your balances all down to zero. Keep a little bit on there whether that’s $5 or $10 or $20 just make sure that you’re not paying everything all off. Leave some balances on there. If you pay off all your credit cards and you pay them down to zero, it’s actually going to lower your score. It’s not going to boost it.
Request a Credit Limit Increase
The next instant way to increase your score is to get a credit limit increase, but don’t spend it. Call your credit card company and see if you can get a credit limit increase. That’s instantly going to boost your score up.
Become Authorised User On Someone Else’s Payment History
The next hack for increasing your credit is becoming an authorized user on someone who has a good payment history. Whether this is a family or friend, find someone that you trust and trusts you and ask them if you can become an authorized user on their credit card or their line of credit. You want to be careful to make sure that it is a major lender, or a major credit card. These include MasterCard, your Visa or American Express, things like that. Make sure that it has a perfect payment history with no late payments. It should have a high limit and a low balance. The older the card, or the line of credit, then the better you are instantly going to get a boost in your credit. That credit is copied over to your credit. It’s kind of cool how simply becoming a authorized user can instantly boost you up. If you have someone that will allow you to be an authorized user, that is a instant way to boost your credit score way up.
Refinance Your Revolving Debt
Remember, I talked about the importance of revolving debt versus installment debt? One way to hack the system is to refinance your revolving debt. That means take out an installment loan or a personal loan to pay off or pay down your revolving debt. Why can this be good? It will increase your score is because installment debt isn’t counted as much as revolving debt. If you are needing help to pay down your revolving debt, or you’re trying to boost your score up instantly, then take out an installment loan and pay down your revolving debt. This will instantly boost your scores.
At Kiwi Cash, we understand it can be a difficult getting ahead when you’re in debt. Our guest blog posts provide many great solutions that can help you financially in the long term. They focus on making money, saving money, investment and credit repair. Continue reading for financial tips and tricks that will help you quickly repay your NZ loan.
Diversify Your Credit
You want to have different kinds of credit. You want to vary your credit up. If you only have all credit cards, or all installment, it’s not going to give you a highest score. One way to boost your credit score up is to have a good credit mix. An ideal credit mix, in my estimation, is accomplished with two credit cards and one retail cards, an auto loan, a home loan and a personal loan. This will give you a perfect mix.
If you don’t have all of these, getting all these different kinds of credit is not going to make a big difference. It can actually reduce your score by putting more inquiries and new lines of credit on it. This is something to work towards so that you do have good credit. Diversify your credit portfolio.
Delete Your Collections
Something else that can instantly boost your credit score is to pay for deleting your collections. Most collections companies will allow you to settle the amount. You pay a lower amount, or you pay the amount that you owe, but under the terms that they delete for collections. Most collections companies will allow you to settle the amount so you pay a lower amount or you pay the amount that you owe but under the terms that they delete it from your credit. This can instantly give you a boost, because it’s reducing the amount of negative information on your credit report.
If you do this, just make sure that you get it put in writing that the company is going to delete the collection account off of your credit. That way, you have some kind of proof. You can also get inquiries removed. If an inquiry has been on there for longer than two years, you can call the company to see if they will actually remove it. Sometimes they will remove the inquiries, although it may not be tons of tons of points on your credit. It depends on how many you have. You can increase your credit score by having these removed.
One of the last things you can do to boost your score is to write a goodwill letter, or a hardship letter, or correct any errors that are on your credit report. This one actually can take some time, but one thing that you can always do is credit repair. You can do this yourself. I do credit repair as a credit consultant. I work with a third-party company for credit repair. It’s the company I used to repair my credit. I definitely recommend them to anyone that doesn’t have the time or energy to put into credit repair.
If you are wanting to boost your credit and you need some help with that, or you want to eventually buy a house one day or get a car, you will want to boost your credit. It is definitely worth the effort. These tips could easily help you boost your score over a hundred points or more in 30 days or less.
Bad Credit Loan
Repairing your credit is a long term project. You may have a situation where you need immediate funds and no way to borrow except by getting a bad credit loan. If that is your situation and you reside in New Zealand, consider getting a loan from Kiwi Cash. Simply visit our homepage and submit your application today!
I work in the mortgage industry and have worked in academia, healthcare, marketing, entertainment, and beauty industries as well. I’ve combined years of knowledge and experience to provide you with a visual guidebook on how to become pretty, paid, and powerful:)