It will easily cost you a few years to be able to lower your credit score from 600 to 700 by practicing good credit habits. In most cases, it may take somewhere between 6 months – to a year to be able to get from 600 to 700 credit score, however, some people do it quicker and some take more time. Below is a detailed breakdown of the various elements and directions on how to create your score.
The Difference Between 600 and 700 Credits Score
To begin with, it is helpful to make the distinction between the difference between a 600 credit score and a 700 credit score.
A credit score of 600 is still often claimed to be good but is a risky one by most of the lenders. It becomes difficult for you to secure an approval of loans and credit cards in case you apply for them and the interest rates that one is charged will not be the best in the market. At this level, you probably have some cases of late payment, collection, missing credit history, high credit card usage, or any other derogatory records pulling down your score.
A 700 credit score is much better and is already in the safe zone and even qualifies for a good rating. This leads to getting better interest rates from lenders, improved chances of getting credit approval, and even the ability to qualify for the best rewards credit cards. It means good credit utilization where the credit scores indicate that there are few or no instances of delay in payment and that the amount used is comparatively lesser than the credit limit.
Major Things to Do to Help Increase Your Credit Score by 100 Points
Growing your credit score from 600 to 700 means that one has to work hard on the issues that are negative on the credit report. Here are some of the most vital factors to focus on for credit score improvement: Here are some of the most vital factors to focus on for credit score improvement:
- Pay Bills On Time: If you want to quickly increase this number, it is enough not to delay payments for any of the bills in the future. Overdue balances can be hugely negative, but since negative information only drops off after 7 years of good payment history, timely payments are positive in the long run. Some of these remedies include: Establishing an autopay or regular prompts for due dates that may be easily forgotten.
- Lower Balances: This is a very severe blow to credit scores as it is considered a sign of high credit card usage, which is wrong. This means that if a company takes statement balances too close to the limit, it is indicative of poor credit control. Utilise credit on cards less than 30% if not less for positive impacts on the credit score. The high balances should be paid off in greater proportion compared to other amounts.
- Fix Errors: Illegibility, combined with mistakes, is detrimental to the credit reports, and subsequently, scores. Get your credit reports and file disputes with the bureaus over incorrect negative items that do not belong to you. Good outcomes mean that the credit scores are raised as the errors are removed.
- Limit New Credit Applications: Every time these applications are made, a hard inquiry is initiated, and this leads to slight credit score declines only for a short period. Limit credit application to situations when this credit is required to avoid having too many inquiries on the credit report. Another disadvantage of having new accounts is that if one signs up too quickly, it is also not good, so takes time.
- Increase Credit History: More current credit card accounts increase your credit history and raise the total credit limit, and thus the credit utilization ratio. Which all help to bring your overall score up, day in and day out. Reducing the frequency of applying for new credit is effective, though one has to be sure to wait long enough for this to take effect.
Dreaming About How Long It Takes… Based on Your circumstances
As for the timing and the number of points that can be raised to achieve the goal of a credit score increase by 100 points or more, it fully depends on the credit scores and report problems. Avoidable errors can sometimes be easily corrected and gain some extra points while other negative practices require more time to reverse and compensate for the lost points.
Here are a few examples of timeframes you could expect based on your starting points: Here are a few examples of timeframes you could expect based on your starting points:
- 600 with several errors to dispute; the score can increase by 50 pts within a couple of months as credit bureaus finish investigations and delete adverse entries.
- 600 and high balances with no mistakes – paying amounts under 30% of the credit limit probably helps to raise the score within 6 months since utilization is reported.
- 600 with late payments less than one year – these significantly worsen the scores at the beginning. However, if you maintain a record of on-time payments and manage your credit card balances well, the score may improve over roughly one year at most, provided you don’t give credit mismanagement another chance.
- 580 where there were previous collections and missed payments (currently paying) – It would take approximately one year to get to the region of 700+ depending on the credit behavior and management of the credit that has been extended to the consumer. It will also mean that their influence on social media will gradually decline.
Strategies to Double the Score to 700 More Easily
If your credit is currently in the high-risk/low score range of the 600s, here are some important steps you can take to reach 700 expediently: If your credit is currently in the risk/low score range of the 600s, here are some important steps you can take to reach 700 expediently:
- Pull credit reports from each bureau and, if applicable, dispute any false information according to the law.
- It is important to cut down all those payments and create alerts for payments such as rent, utilities, loans, or credit cards among others.
- Ensure balances are well below the credit limit, and ideally, make complete payments for credit cards every month. That alone could easily increase your score by 75+ points soon!
- This way does not generate hard or soft inquiries, so it is wise not to apply for credit; at least for some time until the score is back on track.
- Cut the utilization of credit cards by paying more than the minimum amount to reduce the balances more effectively. It is also advisable to avoid having many cards and sometimes you might have to combine them into a single card for easier tracking as well.
- It is also important to add positive information to your credit report by taking small personal loans with on-time repayment schedules or through being an authorized user of other people’s credit cards that have good repayment records.
Levelling up your credit: The Long Term Consequences
Hitting and sustaining a level that is just above 700 is not an easy task and requires extra effort and compliance with best practices when it comes to credit. However, the long-term benefits make it worthy to make the effort in such endeavors.
This score makes you eligible to secure the lowest interest rates on big-ticket purchases and expenses like car loans, business loans, mortgages, and so on. This in itself saves you thousands of dollars throughout these major loans than what high-risk borrowers are charged.
Also, increasing your opportunities to get better rewards credit cards also gives you the chance to accumulate a lot of points or cash back on the regular expenditure that one has to incur. This effectively means that it returns some of the money you spent on it, cyclically.
To climb just to 700 is already very good news, but increasing beyond that increases more in terms of financial gains as you progress. Thus, positively building up responsible habits in credit helps in acquiring higher credit ratings for those purchases that are most significant in one’s life.
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