How To Raise Your Credit Score to 700 In 90 Days

How To Raise Your Credit Score to 700 In 90 Days

Many people do not understand how credit works.  They apply for credit cards and just start making purchases.  They may purchase some small items or purchase large items that they have always wanted or desired. Some people make purchases for retail therapy or enjoyment. Whatever the reason for the soaring credit card balances it can lead to a late payment or two that will effectively lower your credit score. This is one of the bad credit habits that will not lead to a good credit score. Hence, you will have to unlearn these and other habits to reverse this trend and fast. Let’s review some tips on how to raise your credit score to 700 in 90 days. 

Fortunately, once you have bad credit there are many things that can be done to reverse it.  Credit reports are updated monthly. Therefore, it is easy to begin to implement changes that can help you achieve a good credit score in a relatively short time. The best way is to start with cleaning up some things from day one of this journey. This is how to raise your credit score to 700 in 90 days.

Credit Score

The first thing to do is understand what makes up your credit score. The next step is to identify the best way to improve your credit score.  Are you late on payments? Are your credit cards maxed out to their limits? Or do you not have a good mix of credit that includes credit cards, an auto loan, or a personal loan? Do you need to improve your credit history? This item will take the most time to get you back in good standing with the creditors.  However, some of the other items can be fixed in a relatively short time. Let’s look at each component that makes up your credit score used by the three major credit bureaus – Experian, TransUnion, and Equifax. I will then make some suggestions to improve each component.

  • Payment History (35% of your credit score)
  • Utilization (30% of your credit score)
  • Length of Credit History (15% of your credit score)
  • New Credit (10% of your credit score)
  • Credit Mix (10% of your credit score)

Payment History

How you pay your credit each month builds your credit payment history.  Making consistent monthly payments each month is the key to establishing a good credit rating. However, if you find yourself behind it will not take months of credit activity to get back on track.

The major credit bureaus will typically update each credit account as the credit card issuer or banking institution provides updated credit activity.  This updated information is provided monthly. The credit bureaus will update this credit information at this time or at the very latest within 45 days of receiving the information.  Please note that some financial institutions may update this information more frequently.

The good news is that a monthly update of the credit card payment is a very important factor in increasing your credit score quckly. To stay on track, schedule automatic payments for each of your credit card balances.  You can set up your bank account to pay your credit cards in full each month. This is the way I choose to eliminate credit card debt each month and maintain a high credit score.

Credit Utilization Ratio

I believe that this is the most misunderstood part of the credit score component. Most people say that you should use your credit cards and make payments each month to maintain a good credit score. However, if your credit cards are maxed out and you are only making the minimum payments this will negatively impact your FICO credit score.

The credit utilization ratio should be no more than 10% to 30% of your total credit availability.  This speaks directly to risk. If you have high balances on your available credit accounts, you are considered a potential risk. Most financial institutions will perceive you as being close to defaulting on your credit card account, auto loan, etc.

This is the actual way credit utilization works. Your credit utilization is the sum of all your credit balances divided by all your available credit. For example, if your total balance is $2,500. Whether one card is $1500, another $500, and the final one is $500 it does not matter. The combined total is what is being considered. Therefore, the total owed is divided by your total available credit of say $5000.  The credit utilization ratio would be calculated as $2,500 divided by $5,000 which is 50 percent. You would need to pay your balances down to $500 to be at a 10% recommended utilization rate to achieve an excellent credit rating. A utilization of 30% or a balance of $1,500 of the $5,000 available credit will help you achieve a good credit rating.

The average credit card balance sits at over $6,000 per CNBC.  To maintain a 10 to 30 percent utilization rate you would need available credit of $60,000 to $20,000, respectively. Consequently, many are carrying balances month to month or falling behind on payments.

Increase Your Credit Limit

Another way to reduce your utilization is to request an increase in your available credit.  However, you should be mindful of not exceeding the 30% utilization ratio. More credit should not mean spending more. This is the responsible way to use credit and to also raise your score.

The final strategy would be to get in the habit of paying off your balance each month. I have a credit score ranging from 830 to 850 based on my current credit balance.  I pay off my balances each month and maintain a credit utilization below 10%. This credit strategy worked to improve my credit score and acquire a credit limit increase that I did not have to request.

Length Of Credit History

Length of Credit is worth 15% of your credit score and it will be the hardest component to use to increase your credit score to 700 in 90 days.  Simply, because it requires time to build up enough history.  You must have seven years of credit history to obtain good credit. Therefore, it does not matter how many years of on-time payments you may have you cannot qualify for certain types of credit, loans, or mortgages.

However, if you find that you are coming short of the seven years, there are still many types of credit and or loans that you can obtain.  Just understand that you may have to pay a higher interest rate until you have established the seven years of credit. At that time, you will be eligible to obtain a lower interest rate on a new credit card, car loans, and mortgage.  However, you will also be able to refinance one or more of your loans at a lower interest rate based on your improved FICO score at a later date.

New Credit

Acquiring new credit can help you improve your credit utilization ratio. However, trying to open too many new credit accounts within a short period of time can hurt your credit. That is because hard inquiries stay on your credit report for two years.  While a hard inquiry will stay on your credit report for two years, it will usually only impact your credit for up to a year, and usually by less than five points per Experian. However, if you are applying for too much additional credit resulting in multiple hard inquiries you may appear to be in financial trouble. Therefore, this could be perceived that you could default on loans or credit that you are actively seeking. Be careful when deciding to open a new account.

However, there is no hard or fast rule about how many credit cards you can apply for. A good rule for them is to wait at least six months between new credit card applications. Also, each credit card company has its own rules and regulations when granting a new credit card to limit credit card churning.

Credit card churning is when consumers open new credit cards to earn introductory rewards. They attempt to game the system by opening new credit cards, earning the bonus, and then moving on to the next card. The Points Guy offers firsthand reports about acceptances and rejections of credit applications by card issuers.

Multiple Credit Cards

Please note there is also no hard and fast rule on how many credit cards you can have but a good number is 3 to 4.  This is a good number because it could prevent you from overextending yourself.  However, it is also a great way to separate charges to stay on budget.  For example, in my house, we use American Express to cover all household expenses. We each use our own credit card account for personal items and gifts. I have a third card I use for my blogging expenses.  Consequently, it works out well for me concerning staying on budget.

Credit Mix

The final component of the credit score is the credit mix. A credit mix should include revolving credit and installment credit. I had a perfect score of 850 until I paid off my car.  I will assume it will decrease even further once the house is paid off. Good thing the credit mix only makes up 10 percent of the credit score. Hence, I am not too worried about it since it will only drop my score by a few more points. I will still have an excellent credit score should I need to obtain more credit or refinance.

However, if you are looking to improve your credit score adding additional revolving and/or installment loans will certainly go a long way in improving your credit score. Revolving credit is when you pay off the balance the credit becomes available again to use. This applies to bank and retail credit cards and some credit loans.  Installment credit is when there is a limited number of payments and once you reach the last payment you are done.  This typically applies to car loans, student loans, personal loans, and mortgages.

Your credit mix should always consider your current financial needs and your ability to repay the debt. A good credit mix should consist of the following:

  • Credit Card
  • Auto Loan
  • Mortgage

However, it can also be a mix of:

  • Student Loan
  • Credit Card
  • Auto Loan

Another example could be:

  • Unsecured credit card
  • Secured Credit Card
  • Personal Loan

Your credit mix should look similar to the examples above with some combination of revolving and installment debt. Always a good idea to choose a credit mix that best meets your financial needs and helps with your journey to a good credit score.

What Is A Good Credit Score?

FICO scores range from 300 to 850. The current average credit score is 718 as of November 2023, this is two points higher than the average FICO score a year ago per FICO.com. Here is a FICO score breakdown:

300-499 is considered a very poor credit – 5% of the population.

500-600 is considered poor credit – 21% of the population.

601-660 is considered fair credit – 13% of the population.

661-780 is considered good credit – 38% of the population.

781-850 is considered excellent credit – 23% of the population.

Per Experian, 61% of Americans have a good VantageScore or better.                                                                             

There is no reason why you cannot achieve good credit that more than half the country has been able to obtain.

How To Raise Your Credit Score To 700 In 90 Days

If you find that you have fair credit, follow the above tips for on-time payments and lower your utilization to at least 30%.  You can expect your credit score to increase by 10 points each month. Therefore, if you are at 631 to 660 you can expect to improve your credit score by 30 points within 90 days. This will move your credit score from 661 to 690.  If you are currently at 670 it will get you to the 700 mark. However, it will take a few more months to get to 700 if you are below 661 but you will get there.

For those in the very poor to the low end of a fair score there are some other options you can try that can help your credit score improve. You can obtain a credit builder loan, an unsecured credit card, or become an authorized user on a credit card of a friend or family member who has good to excellent credit. 

Also, begin reviewing your credit reports for erroneous information or any collection accounts.  You should make sure that these negative notations are addressed immediately. Both items contribute to a low credit score.  Per Federal law, you are entitled to a free credit report annually from all three credit bureaus. You can obtain all three from AnnualCreditReport.com or you visit Credit Karma. Credit Karma has an app you can review daily on your phone without affecting your credit score.

Impact Of Credit Scores

One big impact of having a fair to bad credit rating is the ability to obtain credit and higher interest rates when you do obtain credit. Consequently, this can affect your financial situation even more because you will pay more for the car or home you want.  It can also affect your insurance premiums and the ability to get the job you apply for. Therefore, every effort should be made to avoid the things that lower credit scores.

On the other hand, a higher credit score will allow you to obtain the things that you want with the lowest interest rate possible. This will enable you to do more with the funds you have, like building up your savings account and investment portfolio. Less money spent on debt means more money to grow your wealth.

Recap

How to raise your credit score to 700 in 90 days depends on where your current credit score is and how well you follow the above tips to improve your credit score. Here is a recap.

  • Find out what your credit score is.
  • Obtain a copy of your credit report and remove any erroneous information.
  • Make automatic payments monthly to improve your payment history.
  • Calculate your credit utilization. It should be between 10% to 30%
  • Make a budget to pay down large balances to reach your utilization goal.
  • Maintain a good mix of credit that consists of revolving and installment debt.
  • To improve poor credit, obtain a secured credit card, or credit-builder loan, or become an authorized user with the help from friends or a family member.

The above items go a long way to reaching a higher score and financial stability.

This content is for information purposes only.  I do not endorse any of the companies mentioned.  Please research and do your due diligence. Also, I do not get paid if you click any of the links.

Additional Reading:

How Long Does It Take To Recover From Bankruptcy

What Does Pre-Approved For Credit Card Offers Mean

Importance Of Adding Tradelines To Your Credit Report

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