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An excellent credit score says a lot about your financial capability. It shows that you’re a responsible individual who can manage expenses well. The status brings about numerous benefits including lower debt interests and better loan deals.

Many consumers open a credit account in hopes of building an excellent portfolio. However, most of them get lost along the way since they don’t know the exact things to do to improve their credit scores.

Here are 5 incredible hacks that will surely help you build an impressive credit score:

1. Pay your debts immediately

A major chunk of your credit score is based on how well you repay your debts and clear the balance on your card.

Credit card average debt per borrower
Fig. 1. Credit card average debt per borrower
(Source: CreditCards)

Spend only what you can repay in a month. It’d be best if you can clear out all your credit balance by the end of the month. Not only will this save you money from paying interests but also show creditors you know how to handle your expenses. On the other hand, late payments and paying only the minimum every month are surefire ways to knock points off your score.

Some recommend taking out a 401(k) loan to pay for credit card debts, but that’s a risky move. The idea is that, since the funds in your 401(k) is essentially yours, you’ll just be borrowing from your retirement account.

Taking a 401(k) loan is tempting because there’s no need for a credit check to get approved. However, failing to repay the loan can have serious repercussions on your retirement savings. The unpaid loan will be considered as premature withdrawal and will be subjected to at least 20% tax plus other penalties.

The best way to quickly repay the debts is to rein in spending and increase your income stream.

2. Double-check the reports for errors

According to a study conducted by the Federal Trade Commission (FTC), 5% of consumers usually find errors in their credit reports. The number seems insignificant as it affects only a small percentage of customers, but the effect on their financial options can be grave. The difference in score is substantial enough that they had to pay more for products such as loans and insurance policies.

Further study shows that when customers used the Fair Credit Reporting Act (FCRA) process to resolve potential errors on their credit reports, one in four customers found faults in their accounts. What’s more troubling is that only one in five clients who have reported the errors to a CRA saw corrections in their accounts.

These results clearly show the importance of double-checking credit reports for errors. Not doing so increases the potential of receiving a lower score significant enough to affect loan applications. For most users, it’s a hassle to check their reports, more so dispute errors, especially when they believe it will cost only a few points on their score.

To avoid falling for the same mistake, make it a habit to regularly check your credit report. You’re entitled to request a free copy of your report from any of the CRA.

Once you have the report in hand, carefully check for double entries, purchases you didn’t make, and unpaid balances. It may be bothersome to report errors that you didn’t commit, but it’s a necessary action you have to take to save your credit score.

Repair Credit 101 is a credit repair agency that can help clean up your report from errors. We can directly dispute with creditors, CRAs, and government agencies if needed just to straighten out incorrect information in your credit report. Additionally, we can devise strategies that will guide you toward achieving an excellent credit score.

3. Limit your credit utilization

Credit utilization refers to the average amount of the credit limit you regularly use for transactions. It’s computed by calculating your total balance and dividing it over your credit limit.

Lenders see credit utilization as your ability to keep debts within a range you can easily pay back in full. The best practice is to keep the utilization rate around 30% only and quickly pay the balance before the due date. It would be even better if you can manage to bring down the rate further since this will make the balance easier to repay.

Records show that people who have excellent credit scores – that is, those with FICO scores above 720 – don’t let their credit utilization rate exceed 10% of the limit. This means that for a $10,000 credit limit, they maintain their debts to around $1,000 only.

Credit card utilization by state
Fig. 2. Credit card utilization by state
(Source: ValuePenguin)

Credit utilization rate has a major impact on the calculation of your credit score, so make sure you keep a close watch on how you use your card. To help improve your utilization rate, you can try to:

  • Reduce card use
    Swiping your plastic too often will drive the utilization ratio up. If you can’t avoid spending, try paying with cash, a debit card, or an e-wallet.
  • Pay debts faster
    Any outstanding balance you have on the card is counted as part of the utilization ratio. As much as possible, clear your balance quickly to avoid carrying leftover debts into the next billing period.

If possible, pay more than just once a month to reduce your total balance. Even if you don’t manage to completely clear off all your debts, you’d still be able to keep it at a minimum.

To be on the safe side, manage your spending habits to make sure you don’t buy more than you can pay. This is the surest way to minimize your credit utilization ration.

4. Request a higher credit limit

This sounds like a contrarian method, but it’s a logical plan when you recall the concept of credit utilization. By increasing your limit, you widen the gap between your average card expenses and the credit cap. This method will reduce your utilization ratio to help improve your credit score.

For instance, you have a credit card with a $5,000 limit. If you spend $1,000 on average, you’ll have a utilization ratio of 20%. But if you manage to increase your credit limit to $10,000 and still spend the same amount on credit card transactions, your utilization ratio will just be 10%.

It’s not difficult to request for a limit increase, especially if you already have a good credit standing. A simple step like this can have drastic effects on your utilization ratio, ultimately improving your credit score. Check with your creditor to see if you’re qualified for an increase.

Be wary of the additional limit, though, since it can be tempting to also increase your spending.

5. Leave cards open

Creditors prefer clients who have a long history of using the account. They take it as a sign of a responsible debtor who knows how to manage their finances.

Usually, you’d want to ditch an old card for a new one, but that’s a plain mistake you should avoid. Closing one account and opening a new credit line will look like you’re a newcomer who has just entered the scene even if you’ve already been using the system for a long time.

If possible, keep your credit accounts open even when you rarely use them. The length of time you have them available will count toward building your credit score. Still, weigh your options since there are annual fees to consider in keeping the credit line open.

In relation to keeping accounts open, avoid applying for new debt products like credit cards, car loans, or mortgages within the period you’re trying to raise your credit score. Requests for these products require a hard inquiry on your credit history and will alert CRAs on your plan to juggle more debts.


There are many benefits to having a high credit score but you need to know that building an excellent credit score will take time and dedication. It may take years to see a significant increase in your rating, but it will be worthwhile, especially when you can take advantage of lower loan rates and better credit deals in the future.

The best way to improve credit score is to be a responsible user. Avoiding debts more than you can handle, repaying loans on time, and clearing out the balance as quickly as possible are simple but very effective methods in improving your credit score.

You may have been doing everything right, but your credit score is not reflecting your efforts in a positive way. It’s possible that there are wrong entries in your credit report and you’re now suffering from a mistake you didn’t make.

Repair Credit 101 is a credit repair agency who can help you dispute the incorrect credit information on your report and recover the points you need toward building an impressive credit score. If you need an expert on your side to fight for the credit score you deserve, you can contact us through our website.