Do you have a credit score of 730 (or stuck to close to 730) and are you wondering what your approval odds are for credit cards or how to improve your score? In this article, I will tell you everything you need to know about whether or not a 730 is a good credit score for getting approved for credit cards. I will also give you some tips on how to improve your credit score and some advice on how far you need to improve your score.

Is a 730 a good credit score for a credit card?

Generally, a credit score of 730 will be sufficient to get approved for many quality credit cards. However, a lot more goes into the approval decision than a credit score. I will talk more about these additional factors below.

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

What kind of credit score are we talking about?

Before jumping into the article any further, it’s important to clarify what type of credit score you are talking about. There are tons of different types of credit scores. Two of the most popular types of credit scores are FICO and Vantage Scores (Credit Karma). Since most lenders utilize the FICO model, I will focus on that one. 

You should also know that there are different types of FICO scores. Just like new software systems like Microsoft Windows are rolled out every few years, FICO every few years comes out with different editions of its scoring model.

For example, here are some of the previously released editions:

• FICO 98 (1998)
• FICO NextGen (2001)
• FICO 04 (2004)
• FICO Score 8 (2008)
• FICO Score 9 (2014)

Each edition is implemented in order to more accurately predict the credit worthiness of consumers based on new developments in modeling, testing, and research. FICO also develops industry specific FICO scores. In addition to the “general” credit score, there are industry specific scores for the following:

• Auto
• Mortgage
• Credit card 
• Installment loan
• Personal finance

These industry scores don’t typically follow the 300 to 850 scoring model of the general credit score so you might see perfect scores of 900. Since we are dealing with credit cards here, the credit card score would be the most relevant.

How good is a 730 credit score?

A 730 credit score is considered good and just a few points shy of being excellent by many. If we are talking about a FICO score, this score is about 20 points below what would be needed for the best interest rates.

A perfect credit score is technically 850, but in order to secure the best rates you actually don’t need a credit score that high. In fact, the real perfect score is likely a 760. 

Magnify Money, showed that “according to Informa Research, the lowest rates offered on various mortgage related loans are being offered to people with scores at or higher than 760. And, the lowest rates offered on various auto loans are being offered to people with scores at or higher than 720.”

I think that for optimal credit card approvals the minimum credit score somewhere around 750. So with a credit score of 730 you just need to bump your score up about 20 or maybe 30 points to get optimal approvals and rates, in my opinion. But in addition to increasing your credit score you also want to have a more robust credit profile. And below I will show you some different ways to build a better credit profile.

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

Other factors considered for credit cards

Credit history

I think the most relevant factor beyond your credit score is how established is your credit history. You can have a score in the 700s but if you have no or very little credit history that score would not do you much good. On the other hand, if you have a couple of cards or credit lines that have been in existence for several years that is going to significantly help your chances. 

It also really helps your odds whenever you have credit history with the specific bank that you are applying with. For example, if you were applying for a Chase card and you already had a chase credit card opened up for the past five years that could be extremely beneficial. It could also help your odds if you even have a bank account opened with them.

Maxed out cards

If you have credit cards that are maxed out or with high balances that can really hurt your chances of being approved even if you have a decent credit score. Read more below about credit card utilization and how to improve it.

Lots of recent credit card applications

If you have applied for a lot of credit cards in the recent month or two that can also really help or hurt your odds. The reason is that you look like a credit risk in the eyes of the bank. 

Income

Banks are going to be concerned with the stated income when determining your approval odds. Most banks don’t require you to prove your income that you state but some will require you to submit things like tax forms.

Income is mostly relevant for the more premium credit cards and for determining the amount of credit that you will receive. There are plenty of people who get approved for lower tier cards with low incomes, so you don’t have to be making six figures to get approved for good credit cards.

How can I improve my credit score

In case you need a refresher, here’s how your FICO score is calculated.

Your FICO credit score is determined in the following way:

• Payment History (35%)
• Utilization (30%)
• Credit History (15%)
• New Credit (10%)
• Mixed Credit (10%)

Payment History (35%)

Payment history is the #1 factor for determining your credit score.

Late payments will stay on your credit report for 7 years, although some bankruptcies will remain on your report for up to ten years!

Luckily, the negative effect of late payments and other negatives begins to lessen as more times passes, so although it might stay on your report for 7 years, the effect will usually only be felt for a limited amount of time (i.e., a few years).

How much a late payment affects your credit score depends on a mix of factors, including:

• How late they were and the number of past due items listed on a credit report
• The amount of money still owed on delinquent accounts or collection items
• How much time has passed since any delinquencies, adverse public records, or collection items

If you want to climb into the high 700 for your credit score you need to do everything in your power to maintain it 100% payment history. One slip-up of a 30 day or 60 day late payment could easily drop your score well into the 600s. It could take a long time to get your score back up so do everything you can to monitor your payments.

Unfortunately, if you think your payment history is holding you back there’s really not too much you can do expect wait. You could request for a goodwill adjustment and see if you could get the negative remarks removed but the success rate for those are pretty low. Still, it never hurts to try.

Utilization (30%)

Utilization is your credit to debt ratio. You find this by dividing the amount of debt you have by your total credit limit. So for example, if you have a $20,000 total credit limit and owe $20,000 in debt, then your utilization is at 50%.

This can be one of the easiest factors to improve. By simply getting added as an authorized user to an account with a high balance and zero utilization you can easily drop your utilization down considerably. Just make sure that the person that adds you is responsible and won’t ruin your score by maxing out that card.

You could also consider opening up an installment loan and moving your revolving debt into an installment loan. That will essentially remove your debt from your Credit utilization allowing your credit score to improve.

And finally, something else that you could consider is opening up a business credit card that does not report to your personal credit report. In some cases you might be able to do a balance transfer to a business credit card and that debt will no longer show up on your personal credit report and therefore your utilization should drop.

Credit History (15%)

The credit history category consists of the of the following factors:

• Longest opened account
• Average age of account
• Time since newest account
• Time since each account was last used

The most important of these factors is the age of the longest opened account while average age of accounts is second. In order to preserve this you want to keep your old account open as long as possible. Another tactic can be to open up business credit cards when pursuing rewards so that you don’t open a lot of new accounts and decrease your average age of accounts.

Adding yourself as an authorized user can also help your credit history as well.  

New Credit (10%)

This category is most known for its effect felt from hard inquiries.

Hard inquiries result when your credit is pulled for review by lenders and certain other institutions and they differ from soft inquiries in the latter don’t affect your credit score.

Other factors besides hard inquiries in the new credit category are:

• How many new accounts you have
• How long it’s been since you opened your last account

If you’re trying to preserve or build up your credit score you then refrain from applying for new cards. Each time you apply for a new line of credit your score will likely drop around five points although it can vary. You can mitigate this effect by searching for banks that combine credit inquiries when you apply for multiple credit cards at once. 

Mixed Credit (10%)

This category evaluates your overall “mix” of credit lines.

So for example, it wants to see if you have a diverse range of credit consisting of different types of credit lines like student loans, auto loans, home loans, credit cards, etc. If you were trying to improve your credit score this is really the least concern for you.

Yes, it can help if you end up opening up an auto loan or mortgage and you diversify your credit mix. But you shouldn’t go and pursue something like a massive loan like that just to try to improve your score a few points. Instead, this is just the type of thing that if it happens great, if not, then just try to wait until you can improve this on your own organically.

Final word

A credit score of 730 will allow you to get accepted for many credit cards. But the approval decision comes down to much more than just your credit score number. You need to make sure that you have a robust credit profile with plenty of credit history and low utilization so that you are not seen as a credit risk. 

Daniel Gillaspia

Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time travel expert covering destinations along with TSA, airline, and hotel policies. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here. 

The focus on UponArriving is obtaining some of the best rewards credit cards and so when I talk about the importance of credit, that’s usually the #1 reason why. But it’s good to be reminded of all the ways that your credit score can affect your daily life.

Some of these reasons involve being able to save tens of thousands of dollars in interest while others involve enjoying a higher quality of life. So here are several reasons why your credit score is important and how your credit score can affect your daily life.

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

1. Mortgage Loans

This is one of the biggest reasons why you want to have a solid credit score.

First, you might not even be able to get approved for a mortgage if your credit score is very bad.

Second, if you do get approved, a lower credit score can cause you to only get approved for higher interest rates. When it comes to mortgages, the difference in interest rates could end up costing you tens of thousands of dollars. And that’s no exaggeration. 

NerdWallet showed how slipping up on your bills could cause a 0.50% increase in interest rates on a mortgage that could end up costing you over $30,000! And that’s just a 0.50% increase. With more credit report hiccups you could easily end up costing yourself much more over time.

So in terms of financial consequences for home loans, the importance of maintaining a solid credit report can’t be reiterated enough.

2. Auto loans

The same logic applies to getting auto loans. Even if you get approved, you might miss out on better opportunities that could have saved your thousands of dollars in interest or perhaps even allow you an interest fee loan on a car. 

I used the MyFico Loan Savings Calculator to see what the savings would look like on a $30,000 loan over a 48-month repayment period based on credit score.

The total interest paid for a 720+ score was $2,115 but for scores below 690, that total jumped to $4,167 in total interest (over $2,000 more). And that’s just a 30 point difference in the credit score. Things get much worse if you drop below 620. 

3. Home and auto insurance rates

Both your home and auto insurance rates can be negatively affected if you have poor credit. In fact, homeowners with poor credit pay 91 percent more for homeowners’ insurance than people with excellent credit, according to a report.

In some states, such as California, Massachusetts, and Maryland insurers  are prohibited from using credit to calculate homeowner’s insurance premiums but in states where it’s allowed, it can be a costly problem, since about 85% of home insurers use credit-based insurance scores in states where it’s allowed.

And in states that don’t prohibit using credit to calculate auto insurance premiums, 95% of auto insurers use credit-based insurance scores, according to the National Association of Insurance Commissioners. 

4. Housing approvals

As many as 65 to 70 percent of landlords may pull the credit report and credit score of a potential tenant.

If you’re searching for an apartment or other housing you might be limited due to your credit score. If your credit is low, you might require a co-signer or be forced to put down a hefty deposit. In addition, this means you might be forced to live in areas that you’d rather avoid and might mean a lower standard of living.

5. Utilities, phone service, etc.

When it comes to utilities and phone service applications, your credit score is often checked. With horrible credit, you might be stuck with month-to-month pre-paid contracts with inferior service providers and have to deal with the results of that.

Or, just like with housing, some might require you to put down a large deposit to secure their services. Also, you might miss out on deals since consumers with the best credit often get better pricing on new phones than those with lower credit scores.

For example, T-Mobile stated 63 percent of Americans don’t have the 750 credit score required for the best deals in the cellphone industry. Typically, when you see language about “qualified customers” that’s an indication that a promotional offer depends on your creditworthiness. 

Cell phone providers like T-Mobile appear to be becoming more accommodating to customers with lower credit scores so it’s not all doom and gloom if you have a poor credit score, but obviously you don’t want to rely on the accommodation of providers forever. 

6. Employment

According to LearnVest, “47% of employers run credit checks on job candidates primarily to reduce the potential for theft and embezzlement, reduce liability for negligent hiring, and assess trustworthiness.” These checks are more common in industries that deal with money, healthcare, the government, and any kind of sensitive data or information that might involve a security clearance.

By law, employers are required to obtain explicit written permission to check your credit. And they likely won’t actually view your credit score, but a modified version of your credit report called an “employment screening” that omits some details. 

Still, if you have many negative remarks on your credit report, you might run into trouble since it could signal to your prospective employer that you might not be the trustworthy and responsible candidate they are searching for.

7. Student loans

Finaid.org shed light on how credit scores affect student loans and it differs for federal loans versus private loans. 

Federal student loans 

For federal loans you usually don’t have to stress too much because “Stafford, Perkins and PLUS loans do not depend on your credit score.” The Stafford and Perkins loans are available entirely without regard to your credit history, which is pretty remarkable considering how huge those loans can be. 

However, the PLUS loan requires that you don’t have an adverse credit history, such as “being more than 90 days late on any debt or having any Title IV debt within the past five years subjected to default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off.”

Private student loans 

Things are much more serious when it comes to private student loans, though. In the case of private loans,”borrowers with bad credit scores may have monthly payments that are 20% to 40% higher and pay two-thirds to 100% more interest over the lifetime of the loan as borrowers with excellent credit scores.” That’s a huge discrepancy. 

Finaid also remarks that most education lenders break their interest rates and fees into five tiers, based on the borrower’s credit score. “About 20% of the borrowers get the best rate, followed by 35%, 20%, 10% and 15%. Each tier has an interest rate that is 1% or 2% higher than the previous tier.

This means that borrowers with the worst credit scores can have interest rates that are 5% to 6% higher than the interest rates charged to borrowers with excellent credit. The fees are also higher by as much as 9%, although some lenders roll higher fees into the interest rates.”

So while you can get by with having not-so-good credit with federal loans, getting private student loans can be a completely different ball game.  

8. Relationships

Bankrate recently conducted a survey and found that  “nearly 4 in 10 adults say knowing someone’s credit score would affect their willingness to date that person.” And other reports have found strong correlations between strong credit scores and strong relationships. 

I know a number of people who would definitely prioritize someone’s credit background when choosing to date someone since it many cases it can be indicative of responsible that person is in other aspects of their life.

Obviously, if you’re into someone, you’re probably into someone regardless of a 3-digit number, but I think that having a strong credit score can do nothing but help your chances in the dating world and beyond. It’s probably only a matter of time before credit scores are included in online dating profiles (if they aren’t already).

Plus, if you and your partner have solid credit scores, you can get much much further in travel hacking. 

9. You will feel better

Having a good credit score has improved my sense of well-being and that’s not just the case for me. 

Credit Karma in partnership with professors at the University of Virginia, surveyed more than 1,000 Credit Karma members and the found a strong positive correlation exists between credit score, an affinity for saving, and a sense of wellbeing.

Obviously correlation does not prove causation but I think it’s definitely true that a rise in well being accompanies an increased credit score.

Years ago, I dreaded checking my credit score and always just assumed the worst anytime an outcome depended on my credit. Now, it feels great to know what to expect when I check that FICO score and to know that it’s in good shape. I feel more in control of my life and don’t feel like I’ll ever be held back in life by what might be found on my credit report.

If you’re credit score isn’t where you’d like it to be, take that as a worthwhile challenge to accomplish something that will improve your life in many different ways.

It may only require a few months or it might take a year, or two, or three or more, depending on your circumstances, but repairing your credit report and gaining control of how things in your life are affected by your credit can be a very rewarding experience, both financially and psychologically. 

Final word

Your credit score and report have the potential to affect you in almost every walk of life. Just about any major or minor financial commitment can be affected by them and end up costing you tens of thousands of dollars in the long-run not to mention a lot of stress and headache.

Thus, while maintaining a high credit score is crucial for award travel, it’s much more important to take care of your credit for the various needs you have in life. So do what you have to do to improve your credit score and just think of travel hacking as a an added bonus. 

Cover photo: http://401kcalculator.org

Daniel Gillaspia

Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time travel expert covering destinations along with TSA, airline, and hotel policies. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here. 

Goodwill letters to creditors are the first line of defense for many trying to rebuild their credit by getting negative remarks like late payments removed. Goodwill letters are simple letters that just about anyone can author but their success is also very hard to predict. Still, because they are so easy to create and send out it’s often worth giving goodwill letters a shot.

What is a goodwill letter to a creditor?

A goodwill letter is your opportunity to send in a short and sweet letter to request for your lender (or sometimes collection agency) to remove late payments from your credit report. The reasoning for the request is based on reasons that have nothing to do with any mistake made by the lender. Instead, you are requesting for negative information to be removed based on the “goodwill” of the lender.

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

What goodwill letters are not meant for

Goodwill letters are typically not effective for certain types of derogatory marks, such as bankruptcies, liens, and judgments and are mostly used to remove late payments. Also, you generally do not want to send in a goodwill letter for late payments or charge offs that are not paid in full.

As you could imagine, a lender is not going to be feeling very gracious when you haven’t even paid your outstanding balance. If you’ve settled an account you might still give it a try but goodwill letters are best used on late payments for accounts paid in full.

What needs to be in a goodwill letter?

Goodwill letters do not need to be long but they do need to include some specific information in order to maximize your chances of getting negative remarks removed.

Include your identifying information

You want to make the lender’s job as easy as possible when sending in these letters. Start by properly formatting your letter to include your name, address, telephone number, and all of your account details for that lender.

If you have multiple late payments, be sure to identify the exact months and years that were late and by how many days they were late. It’s often helpful if you can print out a portion of your credit report to show them how the late payments are showing on your credit report, although this is not necessary.

Explain your situation

Your goodwill adjustment letter is your chance to show a lender why they should remove the late payments from your credit report.

This is usually done by explaining the circumstances around why your payments were late. For example, if you experienced hard times (a death in the family, loss of job, medical condition, etc.), you will want to bring up this information. You can also add information as to why it’s so important for the late payment to be removed (maybe you’re trying to buy a home, a vehicle for work, etc.).

When including personal details about your situation, disclose all of the pertinent details to build your case but try not to be overly dramatic so that you can retain credibility with whoever is reading your letter.

If you have a long track record of making payments on time with this lender then you absolutely want to highlight this by showing them how responsible you’ve been in the past. Let them see you as a valuable customer who simply had an anomalous slip-up that won’t happen again.

Sometimes you can express your willingness to do things like signing up for auto payment to show the lender how sincere you are about responsibly managing your account.

Strike the right tone

Try to make yourself sound likeable and reasonable (hopefully this isn’t too hard).

Go for a pleasant and apologetic tone. Avoid trying to “sound smart” by using an unnecessary amount of big words and don’t word your letter too sternly. That last thing you want to do is sound like a know-it-all, entitled, or like you’re taking your anger and frustration out on the lender.

Keep your goodwill adjustment letter short

You also want to just keep these goodwill letters short. Lenders see these letters all the time and sending in an entire dissertation on why your late payments should be removed is only going to increase their load and not your chances of removal. As a rule of thumb, keep these letters to a few paragraphs and at a maximum one page.

Manage your expectations

When sending goodwill letters, it’s important to not keep your expectations too high. Lenders are obligated to report late payments to the credit bureaus and are under no obligation to remove your negative information unless there is some type of error with the reporting. So give it a try, hope for the best, and consider it a surprise if it works in your favor.

Drawbacks

There aren’t many drawbacks to sending in a goodwill letter but there are a few potential negative outcomes that could happen. These drawbacks are pretty rare but it’s still a good idea to be aware of the potential negative aspects of sending in such a letter just in case you have bad luck.

Admitting responsibility (on the record)

If you think there might be any grounds for disputing the late payments as inaccurate, you want to be careful about taking responsibility for the late payment. Sometimes lenders will use your goodwill letter against you as an admission of fault for a late payment. In the case of student loans where you might have ground to argue that a deferment or forbearance was not processed properly, this is something to be aware of.

Negative corrections to your report

If your negative mark is only reporting to one credit bureau it’s possible that the lender will see this when receiving your report and actually decide to “update” your report so that all three credit bureaus will show the negative remark. Or perhaps there were other late payments that the lender didn’t report but will discover upon reviewing your file.

Account deletion

It’s even possible that a lender could delete your entire account after processing your goodwill letter (this is more common with accounts that are already closed). If this happens, the removal might boost your score but you could lose the benefits of having the older account on your credit report.

Comment on credit report

There’s also a small chance that your goodwill letter could lead to a dispute comment on your credit report. Sometimes these comments can force FICO to treat your accounts a little differently. For example, FICO might ignore an account while it’s disputed and that could affect things like your utilization. Also, if you’re seeking a mortgage, these types of comments can sometimes cause lenders to deny you.

Send the goodwill letter

You can send your goodwill letter via mail, email, fax, online log-in portal communication, or even call in and speak to someone.

Sending a letter via mail is probably the standard procedure for sending goodwill letters. Some like to send their letters via certified mail but sometimes this can appear like you’re gearing up for a legal confrontation and could cause someone to respond defensively toward your letter.

I would personally prefer to mail my letter (non-certified), fax my letter, or send it in via email just to send out the right vibes.

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

Who to address the letter to

When you send the letter to a lender you can send it to many different addresses.

Many start by sending their goodwill letters to the address found on their bills or an address for things like “card member services” but these letters will often be processed by entry level agents who many not have authority to handle your issue. You can also use the creditor’s address found on your credit report. However, many people are increasingly addressing their letters to corporate recipients.

To do this you can search a company’s corporate website for contact information and look for a “contact us” section or similar where you can find both mailing and email addresses. Feel free to take down all of the relevant email addresses you find on a corporate website and address separate emails to all of them. You never know who may or may not respond.

You can also use corporate directories like www.consumerist.com, www.lead411.com, www.hoovers.com, and others to find contact information. Some of these might not always be updated so you’ll need to follow up.

On the company corporate websites you can sometimes find information for departments like card services. If you can’t find an individual to send your letter to then sending it addressed to a relevant department in the executive offices is still a good option. The key is to continue to try different departments and personnel until you get a response. Eventually someone will likely respond. 

Some people also have luck with other methods like email guessing which you can read more about here.

The response

Sometimes you will never get a response from the lender. Instead, you’ll need to monitor your credit report to see if any changes are made to your credit report.

Goodwill letter sample

There are hundreds of sample goodwill letter online. I recommend searching for a specific type of goodwill letter that relates to your unique situation. If you can’t find one then simply customize a sample letter by including the details of your situation. Here’s a good resource for letter samples.

Avoid drafting a cookie-cutter, cut and pasted letter that an executive will see right through. Put some originality into it along with a personal touch to make it more effective.

Final word on goodwill forgiveness removal letter

Overall, there’s never a guarantee that these goodwill letters will work but it’s usually always worth giving them a try because of how easy they are to write and the low risk of something going wrong.

Daniel Gillaspia

Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time travel expert covering destinations along with TSA, airline, and hotel policies. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here. 

Credit limit increases are an easy way to help decrease your credit card utilization and give your credit score a boost. With a credit limit increase, a bank will increase the limit for you on your credit card so you’re able to free up more credit but also benefit your utilization. And these are issued more often than you think, a March 2017 poll conducted by CreditCards.com found that 89 percent of cardholders who requested a higher credit limit received one.

Hard pull inquiries

One thing you need to be aware of before requesting one of these is whether or not the bank will issue a hard pull on your credit report before they process the increase, since a hard pull could decrease your credit score by several points. Many banks will make a hard inquiry when you request a credit limit increase but not all of them will. If they do, then you’ll have to decide if another hard inquiry will be worth the increased credit limit (assuming they approve it).

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

Timing

I suggest waiting at least six months before requesting a credit limit increase on your credit cards. It’s possible that you could get one sooner but many issuers are reluctant to grant you an increase until you’ve shown them some positive payment history of around six months.

How much to request

These increases are usually relatively small but generally people request about a 10% to 25% increase. It’s possible that you could be given more than that (I was once given a 50% increase) but try not get too crazy when requesting the credit limit increase. If you ask for too much, they might deny you altogether. If your request for a credit limit increase is denied, plan on waiting at least another 90 days before requesting one a second time.

How to request  

You can sometimes request these online when you log in to your account to manage your credit cards or you can just call up the bank and request it.  If you call, be prepared to explain to a representative why you want the increase.

Avoid sounding desperate and try to bring up things like your solid payment history with the bank to persuade them to give you the increase. If you recently got a raise or are in a better financial situation than you were when you opened the card you can bring that up. Also, if you’re planning on making some larger purchases in the future (weddings, remodeling, vacations, etc.) that can also be a good reason. (Just watch out because some banks will sometimes offer temporary credit limit increases to assist you with single purchases.)

Your goal is just to leave the bank agent with assurance that you’re going to be responsible with the increased credit limit and aren’t requesting one because you’re struggling to make ends meet.

Auto increases

Banks will sometimes increase your credit without you even asking. If you have a low credit limit and are constantly coming close to hitting that limit and are constantly paying off your balance, there’s a good chance you might get a credit increase. However, if you’ve been waiting for over six months, it’s probably time to call them to inquire about it.

Consider transferring credit

If you have more than one credit card with a bank there’s a possibility that you might be able to transfer credit from one card to another. Not all banks allow this and sometimes these come with restrictions but banks like Chase will usually allow you to transfer from one credit line to another. By doing this you can improve the individual utilization on one of your lines without incurring a hard pull (but always be sure to verify that there won’t be a hard pull).

Don’t wait until it’s too late

One final tip, if you want to bump up your credit line try to ask for the bump when you don’t need it. If you wait until your credit card is maxed out or when you’re only making minimum payments then the bank will probably be less likely to raise your credit limit because they will see you as more of a credit risk. Also, it’s a good idea to actually use the card you’re going to request a credit increase for. Otherwise, a bank may see no need for your increase and deny you.

Daniel Gillaspia

Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time travel expert covering destinations along with TSA, airline, and hotel policies. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here. 

It’s easy to take credit reports and credit scores for granted. But could you imagine living in a time where even the idea of a credit reporting agency didn’t exist? How could you go about finding out if someone had a good enough track record for you to know that they wouldn’t vanish overnight after you shell out your cash to them?

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

Humans have been borrowing from each other for thousands of years. Back in 3500 BC ancient Sumerians may have first issued loans for agricultural purposes in Mesopotamia and in Babylon around 1800 BC the Code of Hammurabi codified ceilings for interest on loans for grain and silver. (Interest has been a point of contention in many civilizations and outlawed as usury during periods such as the Dark Ages due to the belief that it was something God frowned upon.)

But determining the creditworthiness of others, at least in some sort of systematic fashion, is still a relatively recent creation. In early Colonial times, bankers and merchants didn’t have FICO reports to instantly pull so they had to resort to other more simplistic means. Neighbors and other counterparts would vouch for the character of the credit applicant and after checking up through the grapevine, bankers would then decide to issue credit. If Abitha, the local basket maker, didn’t think too fondly of you or your family, your hopes for opening up the next big tavern in town may have been over before they started.

This highly subjective method of determining creditworthiness was too inconsistent, and perhaps even more problematic, it lacked the sophistication to keep up with the increasing number of transactions that came along with the rise of industrialization. Lenders were being asked to extend credit to more and more customers who they lacked knowledge about.

In places like the UK this growth helped create the first efforts for credit checks. In the early 19th Century, English tailors started sharing client information with each other in an effort to find those clients who did not pay their debts. They even started the Marvel-esque sounding “Society of Guardians for the Protection of Tradesmen against Swindlers, Sharpers and other Fraudulent Persons” in 1826 in Manchester, England. But the British ran into the same issues as those in the U.S. — gossip and hearsay could go only get you so far. Eventually they needed much more. So in 1857, the Manchester Guardian Society appointed its first “data accuracy officer.”

Back in the U.S., folks began experimenting with different ways to accurately report credit and several credit reporting experiments were born. One of the most well-known of these experiments was the “Mercantile Agency” founded in 1841 by Lewis Tappan. Tappan was an abolitionist and Calvinist who actually had strictly opposed credit and lending money based on his religious beliefs but after experiencing harsh economic times and the “Panic of 1837,” Tappan realized that extending credit might be the only way to create viable business.

The Panic of 1837 had also taught Tappan how important it was to properly extend credit and accurately assess the creditworthiness of individuals. Luckily for Tappan he had built an extensive network across the country while being a well-known advocate of the abolitionist movement. This helped him to retrieve and store information about customers located throughout the nation. Tappan built up such a large database that other merchants reached out to Tappan for his data and his business began booming.

This method of collecting and storing data wasn’t met with open arms by everyone, however. Citizens accused Tappan of invading their personal privacy with his extensive file libraries but despite the criticisms the Mercantile Agency prevailed and by 1844 it had over 280 clients.

In 1849, Tappan retired and Benjamin Douglass took over the business. Ten years later, Douglass transferred the company over to Robert Graham Dun, who changed the “Mercantile Agency” name to “R.G. Dun & Company” and continued to expand business over the next few decades.

At the same time of this name a change, another powerhouse and rival was formed. In 1849, the John M. Bradstreet Company was founded in Cincinnati, Ohio, by a relative to American poet Anne Bradstreet. Bradstreet grew to popularity by publicizing the first book of commercial credit ratings known as the Dun Book. In 1857, Bradstreet published a highly detailed version of this book and the competition between the two firms picked up and in 1864, the former Mercantile Agency, R. G. Dun and Company, created an alphanumeric system that would be utilized for credit ratings for decades to come.

Thus, by the end of the Civil War the foundation was largely in place for credit reporting with commercial borrowers and by 1900 there were around 50 credit agencies operating in the US. But credit reporting focused on consumers was still not something that existed. But that would soon change, as the first credit bureau emerged near the end of the 19th Century.

In 1898, in Chattanooga, Tennessee, Cator Woolford created a list of customers that frequented his grocery store that he believed were worthy of credit and then he started circulating this list to other traders. The business soon took off into other industries such as insurance and even into international markets. By 1913 his company was re-branded as “Retail Credit Company, Inc” based in Atlanta, Georgia.

Around this same time, things were beginning to change as the Worker’s Rights Movement began and workers gained more rights along with increased wages. Merchants, including the automobile industry, wanted to cash in on the new state of the economy and so they began offering credit lines. in 1919, GM via GMAC started offering automobile loans and by the 1920s more than 20 percent of purchases made in US department stores were on credit, as things like appliances, furniture, and radios were becoming increasingly common to purchase with installment plans.

Credit reporting agencies like the Retail Credit Company were growing and more and more Americans were becoming more open to borrowing money based on credit to make purchases. But once again, security and privacy issues would rile consumers.

The Retail Credit Company didn’t just mine data on credit profiles, capital, and character, but it even delved into other aspects of borrower’s lives regarding things like political affiliation, marital troubles, childhood, drinking habits, and even sexual activity. It was even rumored that the RCC would reward its employees for finding dirt on consumers. (Could you imagine this going on today?) This led to a lot of resistance toward the RCC, especially when RCC announced they would be storing this information in these new contraptions known as computers, allowing for much more rapid transmission of such personal and at times damning information.

Alan Westin wrote in a 1968 New York Times article that, “transferring information from a manual file onto a computer triggers a threat to civil liberties, to privacy, to a man’s very humanity because access is so simple.” The outcry would eventually lead to the passing of the Fair Credit Reporting Act (FCRA) in 1970—a landmark piece of legislation that came with a host of rights. Notably, it forced credit bureaus to make their files public; remove data on race, sexuality and disabilities; and also remove negative information after a certain time period.

The circus surrounding the hearings and the passage of the FCRA is thought to have been so damaging to RCC that in the 1970s it changed its name from the Retail Credit Company to a company called Equifax, as it is now known today.

Back in the 1950s another credit reporting agency was coming into existence. Two of the most famous aerospace engineers, Simon Ramo and Dean Wooldridge had been leaders on the Intercontinental Ballistic Missile program established in response to threats from the Soviet Union. These two visionaries believed cashless payments were the way of the future and knew they could apply their scientific and technological knowledge to commercial markets to determine individual creditworthiness in order to effect such payment methods. Despite the voices of many skeptics, they worked out a deal with Thompson Products in order to obtain the needed capital and formed a joint business known as “TRW.”

TRW used some of the most talented software engineers in the US to catch up to their competitors like the Retail Credit Company and in 1968 they entered the credit reporting industry with the acquisition of San Francisco-based “Credit Data.”

(1968 was also the yearTransUnion formed as a holding company for a railroad leasing organization. A year later TransUnion acquired the Credit Bureau of Cook County, which maintained over 3.6 million card files giving TransUnion the jump start it needed to compete in the market.)

TRW’s technology-driven approach accelerated their growth while allowing TRW to remain accurate and effecient with their handling of credit reports. Some even have referred to TRW as the “Google of their time” because of their powerful informational databases used for things like targeted marketing. By 1986, TRW had become the first credit agency working in all 50 states, although RCC AKA Equifax was hot on its trail.

TRW, later known as TRW Information Systems & Services (TRW IS&S) experienced some mighty struggles in the early 90s during the recession period but they pulled out of the recession with innovative projects like “File One” which helped better consolidate credit records. In 1995, after battling for years through economic struggles,TRW IS&S decided to put the company up for sale and two private equity firms purchased them. They came up with a long list of potential names like Actua, Cogneo, Factbase, Fidelta, Informedia, Knosis, Newlight and Trustin but ultimately settled on one: Experian.

So all three credit bureaus were now born in the US: Equifax, Experian, and TransUnion. But as the big three emerged, there were still glaring differences between the credit reports and a pressing need for better accuracy and consistency given the growing markets for credit. And this is when FICO came in.

[Part II will continue with the History of FICO Scores]

Daniel Gillaspia

Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time travel expert covering destinations along with TSA, airline, and hotel policies. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.