How to Raise Your FICO Score When All Else Fails

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A reader recently left a comment about her credit score that I thought was worth sharing. Here’s what she asked:

What can i do to build my credit if–

1. I cannot get a “real bank account” due to Chexsystem
2. I got denied for a secured credit card
3. I currently do now own any credit cards

It seems impossible at this point to raise my credit score. I’ve tried numerous things, and I keep getting rejected.

Is there anything i can do to raise my FICO score?

Before we dive into some suggestions, let’s look at the reader’s dilemma in some detail.

ChexSystems

First, the ChexSystems she refers to is similar in concept to a credit score. The difference between ChexSystems and a FICO score, however, is that FICO grades your use of credit, while ChexSystems keeps tabs on how you use bank accounts. Bounce a lot of checks, for example, and your ChexSystems rating could disqualify you for a traditional bank account. At that point, your only banking options are a second chance checking account (which can be expensive) or a prepaid credit card that offers banking features like online bill pay.

Secured Credit Cards

Second, the secured credit card the reader refers to is specifically designed for folks with poor to fair credit. Secured cards require a deposit in the amount of the credit limit to guarantee payment of future bills, so it’s a bit surprising she was unable to qualify for the card. If you are in a similar position, I’d suggest applying for another secured card. We list the best secured credit cards here.

Raising your FICO score

It can be disheartening when you want to improve your credit score, but nobody will extend you credit. If you or somebody you know is struggling to raise their FICO score, here are some suggestions:

  1. Credit report and score: The very first thing to do is to get a copy of your credit reports and scores from the three major credit bureaus. You can get your reports for free from annualcreditreport.com, but you won’t get your scores or an explanation of what your credit report means. There are a number of companies that offer FICO credit scores for free and an explanation of why your score is what it is.
  2. Secured credit card: For those with really bad credit (e.g., bankruptcy, foreclosure, write-offs), a secured credit card is the single best way to rebuild credit. You have to pay a deposit that will be equal to your credit limit. Most secured credit cards require a minimum deposit of $200. You then use the card like any credit card and pay your bill each month (on time, of course!). Your payments are reported to the three major credit bureaus. The fees on the better secured cards are reasonable, and it’s one of the fastest ways to pull your credit out of the abyss.
  3. Store or gas credit card: If a secured card doesn’t work out, consider a store or gas credit card. Even with bad credit, you should be able to get a store or gas branded credit card. The card will likely have a low credit limit and a high interest rate. But if you pay the card off in full each month, the interest rate won’t matter. And it’s another way to slowly build your credit.
  4. Time: Finally, it’s worth noting that sometimes you just need to give your credit file some time. As negative items eventually get removed from your credit history over time, your score can improve. Patience may not be what you want to hear, but sometimes that’s all you have.

There are other ways to improve your credit score, of course. For example, you’ll want to make sure there are no errors on your credit report, and get them corrected if there are. You also want to limit the number of credit applications you submit, as credit inquiries can lower your score.

If you’ve been in a situation similar to the reader who left the question above, tell us how you are improving your credit score. We love to hear about success stories!

Published or Updated: May 25, 2012
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

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