Over the past approximately two months I have managed to raise my credit score at both Equifax and TransUnion by over 200 points. How? Well, it wasn’t cheap, and it wasn’t easy. But it was worth it.
What Was My Credit Score When I Started?
Several years ago I had made some stupid mistakes, sent some stuff to collections, maxed a credit card, and missed payments. Where did I start? At the bottom. Being young and stupid. But fast forward 5 years and you have who I am today. A 27-year-old man, engaged, with a baby and a stable income, looking to buy a house before the lease ran out in July.
I had always been a regular tracker of my credit via Credit Karma (highly recommend) so it was no surprise to me when the bank told us I needed to increase my score.
At the time we got told that my score was AT 458. That is terrible! According to most reporting agencies that put me in the bottom 4% of all Canadians.
I couldn’t get approved for anything. I barely got approved for a secured credit card!
What was Dragging Down the Credit Score?
Two big things were dragging my score that low, and it gives kind of a hint as to what I did to raise my score so quickly.
Collections and Credit Utilization
In late 2015, early 2016 I was broke as broke could be and so I let most of my bills slide to collections. This included an EMS bill (full story later), a power bill, and a cell phone bill. At the same time, my credit card was significantly over its limit, putting me at a credit utilization of about 116%.
My credit card stayed at this high percentage as the years went by until approximately 2019, where it was no longer over the limit, but still stayed in the 90-95% utilization range. And that is where the first changes needed to be made.
How Did I Start to Raise my Credit Score?
To raise my score I did 5 things.
1. Find out reporting dates
One of the easiest things to do for raising your credit score is to find out when all of your accounts report to the credit agency. Since credit reports are only a snapshot in time this makes it so that you can manage your finances and put your best foot forward when that snapshot is taken.
In my case (and yours may be the same if you’re with CIBC) my credit card reported to the Credit Bureaus on the 14th of the month, unless the 14th was a Saturday. In which case it reported on the 12th. If the 14th was a Sunday it reported on the 16th.
2. Lower utilization
Since I now knew what day my credit card reported its balance, this meant that every month I just had to make sure that my credit card was at $0 from the 11th until the 16th so that no matter the month it showed as $0 on my credit report.
Tip: If you over pay your credit card (have a balance owing to you) it will still show as $0 on your credit card and can alleviate the stress of constantly making payments in that window of time
Since credit utilization is approximately 35% of your total credit score, and I only had one credit card, even this small change increased my credit score by almost 100 points.
3. Pay off collections
Next was to look at your credit report and find collections. Or more specifically, the company that holds your collection account. And then call them. I know it may seem weird as at this point I was far past dodging and blocking the phone calls from them, but had simply stopped receiving them because they presumably gave up.
However, I bit the bullet and called them and that is where calling collection agencies can change everything. At the beginning of this journey, I had four items that had gone to collections. An EMS bill for $350, a credit card I got when I was 18 and never paid off, so it had $580 owing, and a similar situation where my bank went into overdraft so I never paid it, and it got sent to collections, and an internet bill from a now out of business ISP.
All of these items went to collections around the same time (2016) so I called each of them and discussed how much was owing, and how much they would accept as payment. While also learning something that would help me when I disputed everything.
The ISP that I had previously had internet through had gone out of business and as such the collection company had no record of why I owed them money, my account number, or anything. They just had my name, on a spreadsheet, with the amount I owed.
4. Dispute EVERYTHING
After learning that one of my collections accounts had essentially no information I disputed it and claimed it was false.
Since the collection agency wasn’t able to show that I was the valid owner of the account, or what the money being collected was for, it was simply removed from my credit report. no money out of pocket, and no record of any kind to affect my score.
I tried this as well for the other three accounts (because you never know), but as they were legitimate they stayed on my report.
5. Get it in Writing
Next up was to handle the legitimate collection accounts. And unfortunately, the only way to really do that is to either wait 6 years for them to leave your report, or to pay them. I opted for the second. Knowing I was going to be paying there were a couple of things I learned.
- The collection agency will take months to update your credit report IF they ever do.
- Without the paperwork, it means nothing.
With that in mind, I went one by one calling all of the collection companies that held my debts and agreed on a settlement with each of them. With each of them, I also made sure to demand a Release Letter. This is a letter they mail (or email if you ask) stating that you have completely paid off your debt and are no longer liable for it.
6. Dispute it Again
The final step in all of this is to once again dispute the accounts on your credit. On the dispute note that the account has been paid off and currently sits at $0 owing. Fill out all of your information, including the exact account number, submit those fresh letters you just got, and wait. Within up to 4 weeks (Transunion had mine done within 48 hours), your credit report will be updated to show a zero dollar balance on the account, with the collection removed.
And then boom, an increased credit score!
Finally An Increased Credit Score
So after all of that work. All of those months. And all of that waiting you will FINALLY have an increased credit score. In my case, it took about two months from start to finish. I settled all of my collection accounts the same day. I submit disputes for all of the items and the same day I paid them off. And it still took two months.
This journey and was and will continue to be a long one. But where my credit score was 458 before, it is now a 694. All by figuring out when my credit card reported its balance and making some phone calls. Only 6 points below what it takes to get a mortgage. And, with time, that will certainly increase.
Interested in getting your own credit score up? Here are all of the resources I used to increase mine:
Equifax (to request a free report)
TransUnion (to request a free report)
Credit Karma (To track my Transunion report)
Borrowell (To track my Equifax report)
There are some other pages on my site that may help if you want to learn more about credit, how it works, and what you should be wary of. Check them out here.