Category: Improving Credit (Page 1 of 2)

Tricks on How to Improve Your Credit Score Fast

Updated 11/07/17

Did you know that even if you never missed a payment your credit score may still be below 650? Why? Credit models do not only look at your timely payments when they calculate your credit score. They look at many factors. So listen up for a few simple tricks on what can be done to improve your credit score fast.

Credit Utilization

As my readers already know, credit utilization (how much of your credit line you spend) is a biggy when it comes to credit. If you have high balances your credit score will be low! High utilization will be anything above 15% of your credit line. (Example: If your credit line is $10,000 make sure your balance is below $1,500.)

So the number one step you should take to improve your score should be to review your credit report. (You can order a free copy once a year by or, I would recommend setting up a account by, to receive updates every 7 days.) Check through your accounts and balances and make sure they are all below the 15% mark. If they are, then good. If not, then you found your problem. Pay it off and wait till it gets reported as paid. (Usually it gets reported by the closing date of your credit card.) At that time, your credit should shoot up. (I saw it happening by more than 100 points!!)

What to Do if You Don’t Have the Funds

If you can’t afford to pay off the balance, then I’m going to give you another trick. If you have a business credit card, then you might want to consider transferring your balances to your business credit card. This will help you because most business credit cards don’t report the balances to the credit bureau (see a complete list here).So, by transferring your balances to a business credit card, you are actually removing the balance from your credit report.

If you don’t have a business credit card you may want to try to get approved for one. The Chase Ink Cash or the Amex Blue Cash Business are both good options because they have an introduction of a  0% Apr period on balance transfers,  so you will be saving money on interest too.

Asking for a Credit Increase

Try to ask your bank for a credit increase.  This may help you with your credit utilization and also with building better credit faster.

There are banks that will give you a credit increase without making a credit pull. Check out a list here.

Credit History

A very important factor of how to have excellent credit is having a long credit history. Therefore, if your first credit card is less than a year old don’t expect your credit to be too high. Moreover, if you have an old credit card but did not use it in the past few months, fico will look at it as an inactive account and not count it as a positive account. If that is your case, then just start using the credit card again and once it gets reported as used, your score will go back up. If you have old accounts that you closed, then you might want to call the bank to ask if they can reopen the closed accounts.

Piggybacking Credit (Authorized User)

A common and quick way to boost your credit score fast, is by adding yourself as an authorized user to someone else’s  account. Obviously, make sure that account is an old account and has a good payment history. Once that account reports, you should see your score go up a lot.

For more on piggybacking, see the post on Getting Approved For A First Credit Card.

Checking your Credit Report

Of course, you also want to check your credit report to make sure there are no negative errors found on your credit report. If you do find any, you may want to have a professional lawyer dispute it for you, since it can be very difficult, tedious, and time consuming to do it on your own. I am warning you that it may be expensive, but your credit is worth more!

Did any of these tricks help you improve your credit? Please comment below and let our other readers know.

Good luck!

Does Closing A Credit Card Hurt Your Credit?

Updated 10/25/17

People are always asking me: Does closing a credit card hurt your credit?

Closing a credit card does not hurt your credit directly. But closing a credit card may hurt your credit indirectly.

Confused? Let’s explain…


What is credit?

First let’s go back a step and explain how a Fico score is calculated.

A fico is score is calculated by the following:

  • 35% Timely payments – paying all of your bills on time
  • 30% Credit utilization – how much of your credit limit you spend (less then %15 preferred)
  • 15% Credit history- for how long you have credit
  • 10% Credit mix- the type of accounts you own
  • 10% New credit- how many credit pulls or new accounts you have

(For more on this, see: The 5 Most Important Factors In A FICO Score.)


Credit Utilization

After understanding how a Fico score is calculated, you’ll realize that by closing a credit card you may be hurting your credit utilization (even if the fact that you closed a credit card is not a red flag on its own). For example, let’s say you have four credit cards, each having a $5,000 credit limit (totaling to $20,000.) You spend a total of $10,000 on your credit cards. Your credit utilization would be at 50% ($20,000 limit with $10,000 spent.) Now, by closing one credit card, your utilization would become 75% even without spending an additional dime ($15,000 limit with $10,000 spent.)

TIP: If you have a second card with the same bank, they may allow you to transfer the credit line to the other card, so this will save you from this headache.


Credit History

If you’re closing your oldest credit card, then this may affect your credit history. How? You will be losing your oldest trade line.

For this reason, I always recommend that the first two or three credit cards that you open should be credit cards with no annual fees. As a result, you would be able to keep them open for as long as you live.


Credit Mix

It is beneficial to have five open trade lines with a mix of revolving loans (credit cards etc.) and installment loans (car loans, mortgages etc.) By closing a credit card, you will be losing one of your trade lines. This can hurt your credit.



If you want to close a credit card, make sure to transfer the limit to another open credit card. Also, ensure that it is not one of your first three credit cards. Be careful to have five open trade lines at all times. If all of the above conditions are met, then closing a credit card won’t hurt your credit enough to make you poor.

If you’re closing a credit card it is a great time to rethink the reason you opened the card in the first place. (Maybe it wasn’t the best credit card for you.) Need help choosing the right credit card? Hop over to our credit card page found here and let us help you choose the perfect credit card!

See you next week!

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