Raising your credit score by 100 points involves a couple of practices. First of all, the key to increasing your score is to know the factors that affect it. Here are the five factors affecting your credit score.
First is the payment history that affects 35% of the score. The concentration is usually on your payment behavior for the past 6 months. Although, your report will still take into consideration the past 7-10 years of your credit history.
Next is your debt amount. It is 30% of your score. It weighs your balance to limit ratio. You have to aim for it to be below 30% of your limit. That means if your credit card has a limit of $10,000, keep your balance at $3,000 and below. Here's how it works. Let us assume that you have 2 credit cards with $10,000 limit each. Card A has a balance of $10,000 while Card B has a zero balance. That will lower your score. But if you distribute your balance so both Card A and B share with $5,000, your score will look so much better.
In terms of your credit history which affects 15%, you should keep your old accounts and use them every now and then for small purchases. Just make sure you pay them off immediately and that will increase your payment history and thus increase your score.
Your type of credit is 10% and the best way to maximize this is by having both installment (mortgage) and revolving (credit card) debt. Again, you need to exhibit proper payment behavior for this to have a significant impact on your score.
Lastly, any inquiry for a new account will be reflected in the 10% of your score. If you have to apply for a new account, do it one at a time. To avoid hurting your score with an inquiry, make sure that it is at least 45 days apart. Also, take note that only 10 inquiries in a year can affect your score – beyond 10 and will not be noted by the credit bureaus. There are credit inquiries that will not matter like those done for a job, insurance, utilities, personal and account review.
To further increase your score you have to pay before your due date, avoid late payments and try to have existing ones removed. You can simply call your creditors to request this – point out your past good behavior and explain why you were late this time. Offer to pay a significant amount on the debt if you can afford it.
Find out more about credit scores by visiting National Debt Relief at .