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Credit Score Hacks to Get an Excellent Credit Score in 2021

Is your credit score low or maybe it is decent, but you want to get an excellent credit score? I am going to give you 5 credit score hacks to get an excellent credit score quickly. So let’s jump right in.

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There are 5 different areas that impact your credit score and they all have different percentages so if you are not familiar with how your credit score works then check out my youtube video called How To Get A Perfect Credit Score. You should definitely check that out and get a full breakdown on getting a perfect credit score. In THIS blog, I am going to give you 5 hacks to get an excellent credit score even faster! If you read until the end I am going to give you an extra tip that can super boost your credit score.

Hack #1

The first hack is great because it can accelerate your credit in so many ways, and you don’t have to get into more long-term debt. This hack actually impacts 3 areas of your credit score positively and can save you so much money. The areas impacted are New Credit which is 10% of your credit score, a mix of credit which is 10% of your credit score, and finally Payment History which is 35% of your credit score. Next time you need to purchase a car, pay for it with a car loan, even though you have the cash to pay for the whole car. Then, make 2 payments on time, and pay the car off completely. The reason this hack is so effective is that you are getting a mix of credit which is 10% of your credit score. This demonstrates that you can handle a car loan. Since it is new credit it will impact that 10% of your credit score giving it a lift. Then you will have 2 payments made on time and then satisfied a loan when you pay it off. A combination of these will help boost your credit score. However, this hack has a cherry on top and that is because often times a car dealer will give you a better deal on the car when you are financing because they think they are going to make money on the interest payment you will be making overtime. However, you will only be making 2 payments so you will get the best deal for the car and boost your credit score.

Hack #2

The second credit score hack affects your credit utilization which is 30% of your credit score. Many people are unaware of credit utilization and how it works. However, credit utilization makes up a huge portion of your credit score and is only counted for revolving credit like credit cards, store cards, etc. It is not counted with installment debts like student loans, car payments, loan payments, etc. Since people are not aware of how this works they often get impacted in this area alone. People who have credit card debt think it is a good idea to lower their credit limit to rein in their spending or they think it is a good idea overall to have lower available credit limits. This is not necessarily wrong, but you have to pay attention to the amount of money you are spending monthly or carrying on your credit card. This is where it can get tricky. So the hack here is to find out how much money you spend on your credit card each month or the mix between how much you are spending and/or carrying. The reason is that you want that amount to be below 30% of your available credit limit. So let’s say you have a balance you are carrying that is $2000 and then you normally add about $1000 per month. That means per month there is about $3000 on this card. Even if you pay the balance in full each month, you need to determine how much you are spending because the amount on the credit card each month before you pay it off factors into this calculation. So once you know that number, like in this example of $3000, then you will want to make sure your total available limit is at least 3 times that amount. So for our example, it would need to be at least $9000 to make it even less than 30% then say $9500. This is an area that really hurts people who have maxed out credit cards or just carry a high balance. The best way to take care of this is to pay down the balance on your credit card. However, the hack here is if you can’t pay it down that far right now is to call your credit card company and ask to have your credit limit raised. However, it is imperative that you can’t put an even higher balance on the card because this will just bring your credit score back down. If they won’t raise it high enough then you can get it raised as high as possible and pay it down to 30% or below. This is 30% of your credit score so it has a HUGE impact.

Hack #3

The third credit score hack impacts your Length of Credit History which is 15% of your credit score. People often want to close out credit cards once they pay them off so they don’t rack them up anymore, but this can impact your credit score negatively because depending on how long you have had the credit card it can greatly shorten your length of credit history. This can drop your credit score. You don’t have to leave every credit card open, but for this hack, you would NOT want to close your oldest credit card, because it is important to keep the longest history possible. If you are very tempted to spend on your credit cards, then the best thing to do to keep it active, is to charge a small monthly expense each month and have it set up to automatically pay the balance in full. Then take that card and put it in a baggy full of water and freeze it so you don’t have direct access to it or have a family member you trust, like your spouse hide it so you don’t know where it is.

Hack #4

The fourth credit card hack impacts a mix of credit and also payments on time. Having a mortgage on your credit score can be great because it is usually a larger amount, and it helps with a mix of credit. However, if you are hacking the rat race and trying to retire as early as possible then you may not want to have a mortgage. But, let’s say you want to say travel around the world once you are out of the rat race. A way to get around this is turning your primary residence into a rental property. You want to make sure you have proper cash reserves, but the great thing about rental properties is that you can have a mortgage that is paid monthly by your tenants so you don’t have to foot the monthly bill. Not to mention this makes an awesome income stream. This can be a great hack, because you are getting credit for the payment and mix of credit, but you are not even making the payments. Your tenants are actually making the payments. That being said it is so important that you have proper reserves for repairs and vacancies.

I am about to share with you the final hack and then I am going to give you my super booster tip I promised you at the beginning, so let’s get to it.

Hack #5

The fifth credit score hack impacts the largest part of your credit score which is Payment History and it makes up 35% of your credit score. It is imperative that all of your payments are made one time. It can can really tank your score if you are chronically behind on payments. The hack is to pay the minimum on everything, go on a spending freeze, and put everything you have into getting all of your payments current. People oftentimes don’t realize how much of an impact this has on their credit score. However, getting all payments current and keeping them current can raise your credit score quickly.

Bonus Tip

Now I am going to share with you the super booster tip that is relatively easy and can make a massive impact on your credit score.

If you remember in hack number 2 I mentioned credit utilization and that this makes up 30% of your credit score. Some people may not be able to get below 30% credit utilization or maybe they would prefer not to spend that much money to pay it down. Something you can do is get a personal loan or a consolidation loan. Here is the beauty of this. First, when you move your balance from revolving credit to an installment loan it will take your credit utilization down to zero if you move the whole balance because credit utilization is not counted in installment loans. This will make a huge boost in that area because you will be below your credit utilization and if you recall that makes up 30% of your credit score. Additionally, you will have a mix of credit because you added an installment loan, it also adds new credit. If you are behind, this can be a way for you to get caught up which impacts the other 35% of your credit score. Lastly, personal and consolidation loans often times have way lower interest rates which means you will be able to pay it off so much quicker. However, you want to make sure you use a company that does not have origination fees because you don’t want to pay more for this option. You need to definitely look at all of the fees and costs as compared to paying the credit card off normally. Now, you may be wondering which companies don’t have origination fees?

I have a video called Five Best Personal Loans With No Origination Fees. I also have a video on How To Get An Excellent Credit Score.

Thank you so much, till next time!