If you’ve ever been unfortunate enough to have had bad credit, then you know how frustrating it can be trying to get back on the right foot.

Even if you’re in the process of paying down your credit card debt, you may want to start seeing the results of your efforts in your credit score.

So in this article, let’s chat about tips to improve your credit score WITHOUT paying a dollar.

1. Remove the negative stuff

If you have you’ve got negative reportings on your credit report that are at least within the last 2 years, or worse within the last 10 years, then it’s likely impacting your score.

As time wears on, negative reportings – missed payments 30 days or longer, collections, bankruptcies, etc will lose their sting, but while it’s ‘fresh’ it’s a big problem.

You can have them removed under 3 conditions.

  • As an act of goodwill – you ask the company to do you a solid and they oblige you
  • Pay to delete – you come to an agreement with the company (usually a collection agency) to pay some amount of the debt and n exchange they will remove the filling (don’t pay anything until you get the agreement in writing that they will remove the credit reporting, so if they don’t follow through you can use the next reason)
  • Dispute/removal for breaking the law – sometimes the company misrepresented the information, for example, said you were 60 days late when you were only 30 days late, or maybe you weren’t late at all. As a part of the Fair Credit Reporting Act, you have a right to having accurate reporting, removing outdated data older than 10 years, and many other rights that you can find the full list here.

The best way to get started on removing negative items from your credit report is to pull your reports.

You can do that for free from each of the credit bureaus at annualcreditreport.com.

Once you see what’s on your credit report then you’ll know where what to work on.

Start with the goodwill request, if that doesn’t work then consider asking for the pay to delete, then if there are errors you can try the next option.

Now some folks might use the dispute/removal tactic when there are no errors in hopes that the company is unable to verify information or prove the debt and ultimately remove the listing but that’s hit or miss. Sometimes it works, sometimes it doesn’t,  it may come back or worse, you make a negative item that was old and not causing you any trouble ‘live’ again, demolishing your sore … ugh.

WHY THIS WORKS: Negative items on your report can tank your score. Removing negative items can give you a boost really quick with potentially no payments needed.

WHAT TO LOOK OUT FOR: Removing items from your credit report doesn’t absolve you from paying the debt, the company has to agree to that. But it helps to improve your credit score while you work on it.

If you don’t have an error on your report, it’s likely not worth the risk to dispute, but as said before, some folks do it and it works out for them, but trek at your own peril.

2. Have your friends vouch for you

There are 5 factors that FICO uses to determine your credit score.

  •  payment history (35% of your score)
  •  credit utilization (30% of your score)
  •  credit history (15% of your score)
  •  credit types (10% of your score)
  •  credit inquiries (10% of your score)

A fast way to show FICO that you have positive features under these factors is to become an authorized user on a person’s credit card.

Being an authorized user is a secret method to get ‘bonus points based on association’ to boost your credit score.

It works by finding someone you know and trust that has good credit, adding you to their credit card (as an authorized user) to their best card – longest history, with the best payment history.

WHY THIS WORKS: You get to benefit from that person’s good payment history, it boosts your credit utilization because it’s higher access to credit that isn’t being used, and you benefit from their credit history as though it was your own. WIN WIN WIN.

WHAT TO LOOK OUT FOR: Their credit performance with that card impacts yours. So if they default on the card, miss payments, etc, then it impacts you and dumps your score too.

3. Fake it ’till you make it

The largest factor to improving your credit score other than payment history is your credit utilization.

That’s calculated based on diving the amount of debt you are currently carrying. by the amount of credit available to you.

So if you have $5,000 available credits(sum of all your credit limits) and you have a balance of $3000, then your credit utilization is

($3,000 / $5,000)*100 = 60%

One way that folks improve their credit is by paying down debt, but since we’re focusing on how to improve our credit without paying more then this is how you ‘fake it out’ until you can pay it down.

1. Increase your credit limits – by requesting a credit limit increase on each of your credit cards.

WHY IT WORKS: By increasing your credit limit you increase the amount of credit available thereby lowering your credit utilization for example.

if you increased your limit to $10,000, and still keep the $3,000 balance then your credit utilization now becomes

($3,000 / $10,000) * 100 = 33.33%

the lower your credit utilization the better.

2. You can consolidate your credit card debt. – by consolidating your credit card debt, you pay off your old credit cards.

WHY IT WORKS: Paying down your credit card balance to zero and opening a new type of debt – a loan – frees up your credit card limit bringing your credit utilization to zero, boosting your score. And putting the old debt on a loan that usually has a lower fixed interest rate can help you pay off the debt faster.

And if you’re worried you can’t get a loan because you have less than stellar credit then check out Payoff, they offer loans for folks with credit scores starting from 640. And credible is a great way to get rates from multiple providers (all in one place) without having to run your credit and messing up your score.

3. Get another card to bring up your numbers – now this one is a little tricky. Getting another credit card opens you up to getting credit inquiries reducing your score, and applying for too many cards too soon can make it look like you’re panicking and desperate.

But here’s how it would work – you pick a card that’s ‘easy to get’. I personally have never had any of these cards, but some have said found these are more lenient to folks and gives higher credit limits- Navy Federal Credit Union, Fingerhut, OpenSky, self etc and some others where to aim is to just get ‘A’ card that can give you a credit limit that would help lower your credit utilization.

WHAT TO LOOK OUT FOR: This isn’t for folks who haven’t dealt with the underlying reason they ended up in debt. If you haven’t stopped spending, and don’t have a debt pay off plan then you could end up in SERIOUS trouble if you rack up more debt on your newly emptied credit cards.

Furthermore, when it comes to getting new cards, you run the risk of getting denied (it goes with the territory) and if you might end up in trouble for using a card you didn’t need and getting back into debt, then it’s not worth it.

4. Get a credit boost

Experian credit boost who , by their data, found that many clients saw a 13 points increase on average.

Experian Boost works by giving you ‘credit’ for your good payment history on phone bills and utilities.

WHY IT WORKS: Adding good stuff (payment history) to your credit report helps you to look better the FICO. The more informaiton they have, the better they can score you.

WHAT TO LOOK OUT FOR: You may see no boost at all. If you find that you saw no better or any adverse effects then you can unlink your account and remove the boost.

Also keep in mind that the credit boost is only for Experian and not for other buearu scores.


5. Get Credit for Other Things

Some landlords are able to report to the creditors that you have been making payments regularly and on time.

This can help provide more details about your payment history and help increase your credit score.

6. Wait and let time clean up your report

When it comes to your credit, time really heals all wounds.

As more time passes from the first instance of the negative event, it carries less weighting and that’s because your credit score is a factor of your most recent behavior – what’s going on now and your likelihood to repay.

Credit inquiries are the shortest, they get removed/rolled off after 2 years. Bankruptcies (7 or 10 depending on the type of bankruptcy) and foreclosures (7 years) are the longest.

It’s also worth mentioning that many debts have a statute of limitations, meaning that after a certain period of time, the debt cannot be collected. Now, this differs by state so you’ll have to find out the details for your state, but at least you know it’s possible.

WHY IT WORKS:Because of the very nature of credit score calculation, as time goes by and the events get older then they become less impactful/relevant.

WHAT TO LOOK OUT FOR: You can wait for the debt to hit a statute of limitations but there is plenty a company can do between the first instance of the event and then (which could take years) so it’s not just a don’t pay and all will be well, and that doesn’t remove it from your credit report right away.

But you can keep following good credit habits and just giving it time until your good behavior overshadows the bad since as it gets older it’ll matter less anyway.

7. Practice good credit behavior

No matter what, the most important step to improving your credit is developing and practicing healthy credit habits. And that includes making all your minimum credit card and loan payments on time, every time ( at the very least), stop spending on your credit cards, and not opening tons of new cards increasing your inquiries.

WHY IT WORKS: Your credit score is not permanent and instead is a snapshot in time of your credit usage. That means it changes with your actions. If you end up missing payments, then it lowers your score, as you do better and follow better credit habits, then it increases.

WHAT TO LOOK OUT FOR: Don’t fall into the myths about credit score – like ‘having to keep a running balance’ to keep your credit score or that you should close your card after paying them off. Not only are these not true, but these can be harmful to your score.

Need to get started?

The first step when it comes to your credit score is knowing your score and paying attention to it.

Once you start paying attention then you can make adjustments as needed.

Looking to get your credit score for free? Check out Credit Karma. You can get access to your vantage credit score for free.

Now you know, it’s time to get started!

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