10 Tricks to Increase Your Credit Score (And Fly for Almost Free)

Credit Cards

That Day The World Changed, Flight Deals & Phlebotomy

It was my first semester of college.

One morning I woke before the alarm clock buzz—which never happened—then turned on the TV—which I never did. Smoke bellowed upward. Helicopters circled. Then the South Tower swallowed itself. I skipped class to watch steel and concrete disintegrate into autumn air, twice in real time, then endlessly looped as the news networks turned crisis into cash.

Months later that tradegy affected me directly. In a good way.

Airlines began deeply discounting their seats in a post-9/11 world. Whereas others were too scared to fly, I—along with my brother and a few friends—immediately clicked buy when a US$300 round-trip to Dublin blipped onto Expedia. No money? No problem. The plasma donation center down the street paid cash and Guiness is the perfect meal replacement.

I thought myself pretty slick for celebrating Saint Patrick’s Day in Ireland for less than rent. Little did I know that a subculture existed in which people regularly flew anywhere in the world for half of my best airfare find.

How did I fly to 17 Countries for a total cost of $470?

In 2013 I’ve visited Asia, Africa, and Europe for less than a single flight across the United States.

How?

The short answer:

  • Credit card sign-up bonuses, plus an average per trip US$117 in taxes and fees

The long answer:

  • By using an exact method to apply for credit cards, be approved, meet spending requirements,
    and maintain high credit scores (mine are above 750 after opening almost 30 new credit cards)

But first things first. In order to take advantage of this opportunity:

  • You must have a U.S. social security number
  • You must not be taking out a major loan within the next 24 months
  • You must have credit scores of at least 700 (Get free unofficial credit score here)

Low credit score? That could be a problem, or this could be an opportunity to improve it.
There are many tricks to increase it quickly and legally.

10 Tricks to Increase Your Credit Score

Open a no annual fee credit card

With no credit history you will not be approved for the best travel credit cards. Sign up for a no annual fee credit card to establish some history, then put all your purchases on the card and of course make regular payments. If your credit score is 650 or lower, speaking in-person with an agent at your current bank is your best bet for being approved for a new credit card.

If your credit score is between 650 and 700, get a beginner card like the Chase Freedom. If your application is denied, call the bank, explain that you’d like to develop a financial relationship (hinting that you’re employed and making major purchases), then specifically ask how to get the card approved. As a bonus, you’ll get a foot in with Chase—by far the best bank for travel credit cards—and your purchase points can later be transferred to various airlines.

Never carry a balance on your credit cards

High interest rates cancel out credit card sign-up bonuses’ benefits. Pay off all outstanding balances every month. If you can’t control your spending, then signing up for credit card bonuses is not for you. But hey, you’ll always have Kayak.com

Never miss a payment

Be it your mortgage, school loan, or credit card, one late payment can lower your score by as much as 100 points. That will get you thrown out of the frequent flyer club before you even learn the secret handshake.

Dispute negative marks on your credit scores

If you have negative marks on your credit report (e.g. late payments) you can contact the respective credit bureau to have them removed. It won’t be easy, there will be paperwork (sometimes just online forms). I once removed a 60-day late payment from my credit reports when Citibank sent me a bill after my account was closed and I was unaware it was due. With a bit of luck negative marks can be erased even when you’re at fault. Here are the dispute centers: Equifax, Experian, and Transunion.

Negotiate or settle to have negative marks removed

Call the company or collection agency to remove the negative marks in exchange for an agreed upon payment amount (start with 30% of the outstanding balance, then negotiate up). Important: request written confirmation that negative mark will be removed upon payment. Don’t pay until this confirmation is received.

Send a goodwill or pay-for-delete letter

If the company will not remove the negative marks, send them a goodwill letter. Letter template here. If the collection agency will not remove the negative marks, send a ‘pay for delete’ letter. Letter template: here. These five minutes could literally be worth thousands of dollars.

Maintain total credit usage between 1% and 25%

A credit line is how much a bank is willing to lend you based on your income. (The paperwork that accompanies your credit card as well as its online account will show credit line amounts). Using more than 25% of your available credit negatively impacts your score. For example, if a credit card has a US$10,000 credit line, don’t let the statement close with a credit usage amount above US$2,500 (25% of $10,000). If you find this confusing, just remember to always pay down credit card bills to 20% of the total credit line about a week before your card company’s reporting date. What’s a reporting date? The credit card statement’s payment due date.

Become an authorized user on an account with a long credit history

More than one person can be authorized to use a credit card’s credit line. For example, my parents have a 20 year credit history. When I was added as an authorized user on one of their credit cards the average age of my credit history instantly increased. The best part: I never even touch their credit card and cannot spend on their account. In order for this to work, your social security number must be provided (some creditors allow authorized users without asking for social security numbers). This trick only works with Barclays, Citibank, Capital One, and Bank of America credit cards. Chase and American Express accounts will not boost an authorized user’s credit score.

Keep cards with no annual fees active

A no annual fee card lengthens your credit history year upon year with no additional cost. Keep in mind some lenders will automatically close an account if no transactions appear for six months. Every few months make a purchase on these cards (and pay the balance) to keep them from being cancelled. With each transaction, you’ll reset the six month window. If you’re forgetful, set up automatic charges and automatic payments for small monthly fees like Netflix or Spotify.

Don’t cancel credit cards

Instead of cancelling when an annual fee comes due, call to request that the fee: 1) be waived for another year; 2) the card be downgraded to a no annual fee version; or 3) the credit line be transferred to a different card before closing the account. Options 1 and 2 will continue to lengthen your credit history, while the last resort option 3 will maintain your credit-to-debt utilization ratio. Huh? Don’t worry, that’s a good thing.

Got questions? I got answers.
Drop that bomb in the comment section below.

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