How I Increased My Credit Score 230 Points

It was a tough time. I was young, inexperienced and had absolutely no idea about the importance of a good credit score. My job contract had ended and I was out of a job and essentially out of an income. I had $5,000 worth of credit card debt that slowly snowballed from careless eating out and other small things.

A few months later, I saw my credit score plummet down to 550 points. At one point I needed a car so I headed to the dealership to see what I could qualify for. He ran my credit and quoted me $700/month which really should have been $350/month had I come with good credit. I was stunned.

Essentially I had committed financial suicide…

So how the heck did I get out of this mess?

  1. Pay Off The Debt: I negotiated with the collection agency. I had them slash the original debt into a fraction of the amount. I paid it off in a lump sum.
  2. Don’t Miss A Payment: I decided to make every single payment on time on all of my credit cards. I didn’t miss even one. This was the most important thing I did.
  3. Apply For More Credit: Once my score was out of the red and into the black ( I was making payments on time) I began applying for credit. These cards were basic with small credit lines. But that’s all I was getting approved for. I started charging these cards immediately. You gotta use the cards. They just can’t sit there. My score edged even higher and so I started applying for competitive cards. Banks started to trust me again. They were comfortable giving me more credit.

These three rules helped me boost my credit from the 500s to the high 700s. This isn’t a one month process. This can take a couple of years. Just be steadfast and stick to the plan.