I Raised My Credit Score from Fair to Excellent

Heather Grabin had pretty good credit. But she didn’t have great credit, and that bugged her. “I was always on time for my bills, but my score wasn’t where I wanted it to be,” said Grabin, 28, who lives in Jersey City, New Jersey.

She knew her credit was in the mid-600s, which is a fair score. But she wanted it to be better. “I have a 3-year-old now, and around the time she was one year old, I said, ‘Okay, my credit is going to have to be higher to meet some of the goals I have set,'” Grabin said.

She had a few ambitions: to qualify for rental apartments in her area with a minimum amount of fuss and deposit; to get better rates on personal loans, such as the one for her car; and to have great credit when she started her own company—useful for renting office space and getting financing, if necessary.

“If you don’t have the good history and the good credit, you’ll end up paying higher rates or having to put more money down on things,” said Grabin, who now runs AichG, a public relations firm.

At the time, she was using a credit monitoring serice to keep an eye on her credit score. One day she noticed that one of her credit cards had bumped up her credit limit by $3,000. “So I asked for an increase on another one, and they gave me a significant increase as well,” she said.

Since part of your credit score is based on how much of your available credit you’re using at any given time, having more credit available means a smaller percentage is being used. “That one time, my score went up 30 points,” she said.

Asking for a higher credit limit is a handy move—if you use it sensibly. “Some people, if they got a credit increase, might feel compelled to spend to the limit,” said Beverly Harzog, a consumer credit expert and author of The Debt Escape Plan. “As long as you’re a person who has a good grip on your finances and you use your card responsibly, that’s a very smart approach.”

Grabin also made a point of paying down balances every one to two weeks, rather than waiting until the bills were due. “I feel like it helps you budget better, because you’re constantly looking at it and monitoring it,” she said. And the lower your balances—and the more on-time your payments are—the higher your credit score.

Attacking your credit score from a few different angles can have a compounding effect. “If you’re aware enough of how your scores work, and you’re not in any kind of financial crises, doing a couple of things at the same time is a good idea,” Harzog said.

For instance, several years ago, Harzog took out a very low-interest car loan and paid it off over nine months just to add to her credit mix, which is responsible for 10 percent of your score. “I could have paid cash, but I hadn’t had any kind of installment loan in 20 years,” Harzog said. “This was an opportunity for me to get a mix into my credit, and my score did jump up.”

There are five factors that go into your FICO score: payment history, how much you owe, the length of your credit history, your credit mix and how much new credit you have. “You can look at those five factors and decide how you’re going to maximize your score,” Harzog said.

Grabin has managed to boost her score up to the mid-700s just by increasing her credit limits and paying bills down a few times a month. She now has excellent credit, which can save her money overall.

“Just in the quality of deals you can get on credit cards and mortgage rates, there’s a huge difference there,” Harzog said. “You can also save on many other areas of your life, like health insurance, life insurance, car insurance, and you’re more likely to get in if you’re trying to rent an apartment.”

It’s not a quick process, but if you keep at it, you can raise your score significantly in 12 to 18 months. “You’re not going to get a huge bump like this overnight,” Harzog said.

Grabin is happy with how far she’s come, but she’s not done yet.

“I would love to have a perfect score,” Grabin said. “I’m assuming if I continue doing what I’m doing, it eventually will get to that point.”