To get virtually any sort of loan these days, you’re going to need a decent credit score.  But credit scores can be confusing because there are so many different versions floating around out there (various forms of FICO, VantageScore, etc.) and their formulas are all a little different.  But there are some consistent ways to improve your credit score that will work on all of the scoring models.  Most of them involve the things you would expect, i.e., paying down your credit card debt and making sure to pay on time each month.  Those are all good things to do, but they take time and money, and sometimes you might need a quicker boost to your score.  If you don’t have a lot of money lying around but you want to give your score a shot in the arm, here’s how to boost your credit in 5 minutes, and it won’t cost you a thing.

Primary Factors that Affect Your Credit Score

While each of the versions of credit scores has a different method for measuring creditworthiness, there are some common factors that seem to apply to each of them.  The tricky part comes when you try to interpret each of the factors, or how the score is compiled.

Here’s a list of the factors examined by FICO and VantageScore, and how each factor ranks in making up the total score:


           Factor % Impact
on FICO
% Impact on
VantageScore
Payment History / On-Time Payments 35% Very High
Negative Marks (Past Due Acct/Bankruptcy/Foreclosure) Medium
Age of Credit** 15%  High
Credit Utilization* 30%  High
Available Credit*
 Very Low
Credit Inquiries / New Credit 10%  Very Low
Credit Mix in Use**  10%

*For FICO, these two factors are added together in a category called “Amounts Owed”.
**For VantageScore, these two factors are added together in a category called “Age and Type of Credit”.
Quick side note: different websites report slightly different factors for the VantageScore.  I obtained these categories and their weights from my Lendingtree.com profile.

WTF Does All of That Mean?

Oh good, you’re confused, too.  Even if you think you get the general idea of what the factors are, good luck trying to interpret what’s included in the factors, and how each part really contributes to your overall score.  Some of the groupings make absolutely no sense.  Why would “age of credit” be grouped on the VantageScore with “type of credit?”  I understand why it might be relevant that a borrower has ten years of borrowing experience rather than two, but what does that have to do with whether the borrower has a mortgage loan, five credit cards, and an auto loan versus just a mortgage and a couple of credit cards?

Also, why does VantageScore have separate categories for Credit Utilization, i.e., the ratio between your account balances and the total available credit, and Available Credit?  Isn’t your available credit just the inverse of what your credit utilization ratio is?

Anyway, the important point is that we don’t have to figure out, on a scientific level, exactly how the scores are calculated.  If we have an idea of the categories and what sorts of things affect them, we can still take action to impact our credit scores.

Figure Out Where Your Weak Spots Are

Here’s a screen shot from my own LendingTree profile, which uses VantageScore:

FICO 2.5

So the scores where I’m getting dinged are in the Age of Credit category (remember that this includes Type of Credit for VantageScore) and in the Available Credit category.  As far as the Age of Credit category goes, there’s not a heck of a lot I can do.  My oldest card is my Discover card, which I got at age 18, and I still have and use that account today.  (Pro tip: don’t close your oldest credit cards, even if you don’t use them anymore.)  Not much I can do differently there, other than wait to get older.  Remember that the other part of the Age of Credit category is the Type of Credit.  Because I only have a mortgage and two credit cards that I actually use (rewards cards) along with one credit card and a store card that I never use (no rewards), I get dinged in this category. Ironically, it appears that my credit score would go up if I were less responsible, and had either more store credit cards or an auto loan to diversify my credit types.

But one score that I can pretty easily fix is the “Available Credit” category.  This may be a very low factor on the VantageScore, but it’s one of only two areas where I can improve, so it might be worthwhile.  Also, for FICO purposes, available credit makes up part of the 30% Credit Utilization score.  This is where I’m going to make my move.

How to Boost Your Credit Score in Five Minutes

There are a few ways to boost your Credit Utilization/Available Credit scores.  One is to carry less of a balance on your credit cards.  Another is to keep using your cards as normal, but make weekly or bi-weekly payments on the balances, so when your credit is run, they will be lower than if you had let them run up for an entire month.  But the easiest way to increase the score is just to get more available credit!

But wait: opening new cards will ding your credit.  And if you call your credit card companies and ask for a credit line increase, they will have to pull your credit to make the decision, which will ding your credit, too, right?  Not necessarily!  A lot of credit card companies offer credit limit increases using a “soft pull” instead of a “hard pull” on your credit report.

What’s a Soft Pull and What’s a Hard Pull?

A soft pull is initiated by the credit card company, and doesn’t affect your credit score at all.  When you get random pre-approved credit card offers in the mail, it’s because they’ve done a soft pull and have determined that you meet their criteria to have a card issued.  A hard pull is initiated by the borrower, and that does affect your credit score.  If you apply for a new credit card, or a new loan of any type, that will show on your credit report as a hard pull.  Having one hard pull every so often isn’t a big deal, but you don’t want to have multiple hard pulls within a year or so, because it will negatively impact your score.

Some credit card issuers run soft pulls on their own customers from time to time anyway.  If your credit card has ever surprised you with a higher credit limit, that’s probably because they’ve done a soft pull of your credit and have decided to approve a credit limit increase based on your current score.  These credit card issuers generally don’t do a hard pull on your credit if you decide to ask for a credit limit increase.  But don’t assume you’re in the clear without doing a little homework first.  Some of these will do a soft pull if you ask for a small increase, and a hard pull if you ask for a larger increase.

Some other credit card issuers, on the other hand, are completely stingy, and don’t give credit limit increases unless the borrower specifically asks for it.  It is usually those credit card issuers that do a hard pull if you call and ask for a credit limit increase. Some of them even claim that they’re required to do a hard pull under federal law (Bank of America, I’m looking at you).  It seems to me that if it was required, all the credit card companies would be doing it.  But good luck trying to convince a credit card company to change its policy.

If you’re not sure whether your credit card company might do a hard pull or a soft pull, you can check here, or call them and ask.  I normally prefer looking online first, because phone reps sometimes are wrong, and there’s no way to undo a hard credit pull once it’s done, but do whatever you’re most comfortable with.

How I Boosted My Credit in Less Than Five Minutes

I only have two credit cards that I regularly use: my Discover Card, and my American Express Costco Card.  Fortunately, both of those card issuers have ways to seek a credit limit increase without doing a hard pull.

If you have an American Express card, you’re in really good shape here.  From the information I was able to find, it looks like AmEx ALWAYS does a soft pull, no matter how much credit you’re asking for.  Also, little pro tip: AmEx has a formula for credit increases that can give you a huge credit limit increase in under a minute flat, without even having to talk to a person!  (Can you tell I hate talking to people?) Just log on to the website, go to “Account Services”, then “Credit Management”, and click on “Increase Line of Credit”.  You enter in a couple of details, enter in the amount that you want your credit limit to be, and BOOM, you get a decision on the spot.

Here’s the beauty about AmEx: they will increase your credit limit up to THREE TIMES your current credit limit.  If you have a $1,000 credit limit, you can get boosted to $3,000 in one shot.  If you have a $3,000 credit limit, you can get boosted to $9,000.  Don’t believe me?  There are a lot of people who have tried it and gotten similar results.  I figured I would give it a shot, and with my existing $11,000 credit limit, I asked for $30,000, which feels insanely high to me.  BOOM, approved.  Wow!

There are some limits on when you can ask for a limit increase, though.  If you just got your AmEx, you will have to wait a little while to ask for your first credit limit increase.  There used to be a 90-day waiting period, but now it looks like AmEx might have dropped it to 30 days.  If they approve you for a credit limit increase, then you have to wait six months before trying again.  If they deny you, you can wait 90 days and try again.  Because it’s just a soft pull, it’s worth trying, even if you don’t need all that credit.

For my Discover card, there is no automatic credit limit increase ratio.  But they still tend to be fairly generous when it comes to credit line increases.  And they will do a soft pull if you’re seeking a reasonable credit limit increase.  Log on to the Discover website, click on “Account”, and under “Credit Options” you will see a link for “Credit Line Increase”.  Click on the link, answer just a few questions, and Discover will give you a proposed amount for a credit line increase.  If you take this option, and don’t push for a higher limit, then it’s a soft pull inquiry only, and will not affect your credit score.  If you ask for a higher amount, then they will do a hard pull, so be careful.

I filled out the few questions, and was automatically approved for an increase from $7,000 to $12,000!  And you know, I wonder if Discover might have gone higher if I had done the AmEx increase first.  Most credit card companies don’t want to stick their necks out too far, so it’s difficult to get credit limit increases that are far higher than your other credit card limits on other cards.  AmEx is the anomaly there.  Because I did the Discover increase first, I do wonder if they bumped me up only to $12,000 because my next highest limit (my AmEx) was only $11,000 at the time.  I’ll try another Discover increase in about 6 months, and we’ll see if they go up quite a bit more based on my now higher $30,000 limit for AmEx.

Conclusion: Less than Five Minutes’ Work, and $24,000 More Available Credit

I literally spent less than five minutes getting these credit line increases on both Discover and American Express.  Both were soft pulls, so they won’t negatively affect my credit at all.  And with just that short amount of work, I increased my Discover credit limit by $5,000, and my American Express limit by $19,000, for a total of a $24,000 increase.  If you look back to my Lending Tree snapshot, you’ll see that my available credit was $24,133 as of the moment I logged on.  Now it’s about double that.  Sweet!

Have you tried increasing the limits on your credit cards to boost your credit score?  Or am I the only one who thinks a credit score of 805 (VantageScore) or 830 (FICO) isn’t good enough, and I need to push it even higher?