How to Improve a Credit Score by 100 Points

How to Improve a Credit Score by 100 Points
••• a man with money and a credit card image by Sergii Shalimov from

Banks and other institutions are becoming more conservative with lending money, so a hit to your credit score could stop you from getting approved for a car or house loan and may cause your annual percentage rate to skyrocket. Credit repair is a long process, but it is possible with consistent effort. With perseverance, good financial planning and a little luck, you can raise your score by 100 points.

Pay your bills on time. This requires patience, consistency and often sacrifice. However, paying your bills on time is the most important factor for your credit, determining 35 percent of your credit score. In fact, just one payment more than 60 days late can lower your credit score by 75 points.

Call your creditor if you are late with a payment. You can raise your score immediately by 20 points by explaining the situation and sending in the full amount due. If you continue to pay all your bills on time for the next six months, your credit score will rebound another 30 points.

Keep a low credit-card balance and, if you can, reduce it. Your credit-used-to-available-credit ratio makes up about 30 percent of your score. Statistics say that people who use more of their credit most likely have financial trouble, so using much of your available credit lowers your score. If you run up large balances on your cards or max them out, your score could drop as much as 80 to 100 points. However, if you can dig yourself out of that hole and clear most of the debt from the cards, your credit score can go up by about 80 points.

Check your credit report for errors. A 2004 study by the U.S. Public Interest Research Group reported that 79 percent of credit reports contained errors, such as listing an account as open after the person had closed it. If you find an error on your credit report, send a dispute letter to the credit bureau that issued the report and try to get the mistake fixed. Fixing mistakes on your credit report can often lead to a boost in your credit score.