Top Tips to Elevate Your Credit Score in No Time

Let's be clear right from the start: Excellent credit takes years of responsible financial behavior to build. If you see advertisements from credit repair companies claiming to turn your average credit score into an 800 FICO® Score within a few months, either they're using techniques that won't sustainably boost your score, or they are simply exaggerating what they are capable of doing.

On the other hand, you might be surprised at what a few smart moves can do to your score in a relatively short time frame. If you can boost your credit score by 20, 30, or even 40 points, you could find yourself in a higher credit tier with lenders. Here are four suggestions for how you can make this happen.

1. Take care of any old negative items

The most important category of information that makes up your credit score is your payment history, which accounts for 35% of the FICO scoring formula. But this doesn't just include whether or not you pay your bills on time every month -- it also includes adverse information about your payment history, such as collection accounts, charge-offs, and unpaid judgments.

Now, the impact of these tends to decline as time goes on. For example, if you have an unpaid collections account from five years ago, it will likely have a smaller impact than if it were opened five months ago. But even an old adverse account can have a massive negative impact on your credit. So, taking care of these (if you have any) can be the best way to have a meaningful and immediate impact on your credit score.

It's also worth noting that when negotiating with collectors, you can also ask for specific treatment of the account on your credit report. For example, instead of settling an old collection account for less than you owe, maybe offer to pay the account in full in exchange for deleting it from your credit report entirely. Just make sure you get any arrangements in writing.

2. Avoid new credit applications for a full year

The FICO formula includes a category called "new credit" that includes both new accounts and the times you've applied for new credit recently. But it only considers hard credit inquiries from the past 12 months. If you have any credit applications currently on your credit report, simply avoiding new applications for a year can have a meaningful impact.

3. Pay down balances -- and start with your most maxed-out accounts

The second-most-influential part of your credit score is the amounts you owe, which makes up 30% of the total. But it doesn't put too much emphasis on the actual dollar amounts you owe. Instead, it looks at factors like the percentage of your available credit lines you're using and the balances on loans relative to their original balances.

It's common knowledge that paying down your credit cards can help your credit score. But to maximize the impact, consider starting with whatever accounts have the highest balance as a percentage of your credit limit.

4. Ask for a credit limit increase

In addition to paying down your credit card balances, there's another way you can reduce your credit utilization -- get higher credit limits.

Think of it this way. If you have a credit card with a $5,000 limit and a $2,000 balance, you're using 40% of your available credit. But if your limit is raised to $10,000, you're now using just 20%, even though your balance hasn't changed.

In most cases, you can ask for a credit limit increase online or through your credit card issuer's app. If you've been a customer for a while and have a strong history of on-time payments, the rate of success with limit increase requests tends to be pretty high. Plus, this can often be done without a hard credit inquiry.

How much can your score go up?

One important thing to point out is that the actual FICO formula is a closely guarded secret, and there's no way to know exactly how much any specific change will affect you. Plus, the same credit behavior can certainly affect two people differently -- for example, the worse your score is from the start, the more of an impact moves like paying down credit cards tend to have.

Having said that, these four tips are almost certain to raise your credit score to one extent or another if you use them. And you might be surprised at the impact a seemingly small increase can have on your borrowing costs on a mortgage, auto loan, or other type of credit account.