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To err is human, to forgive takes time -- at least when you're dealing with credit scores.

Even small missteps can deal big blows to your scores that can take months or even years to heal. Bigger screw-ups can keep you in the credit-score basement even longer.

Fortunately, there are ways to speed up the recovery process. Each of the methods described below is perfectly legal, even though we're calling them "cheats." They're more like shortcuts to get better credit.

None of these methods will work for long, though, if you don't have your financial act together. You'll quickly lose any improvements in your scores if you miss a payment or wind up with new collection accounts.


Once you're in a position to pay all your bills and start using credit responsibly, though, you might consider some of the following:

Cheat No. 1: Piggyback on someone else's credit

Being added as an authorized user to someone else's credit card can raise your own scores, if the credit card issuer is cooperative. Many issuers will export the cardholder's history with that account to your credit reports.

Liz Weston

Liz Weston

Some issuers won't do these exports, and some credit-score formulas ignore authorized-user information in their calculations. But the leading credit score, the FICO, still takes authorized-user information into account.

You'll need to first find a cooperative person with good credit (obviously), and that person will need to check with his or her issuer to make sure the information will be exported to your credit reports. If all systems are go, you don't need to have access to the card -- the other person's responsible use of that plastic will help your scores.

Caveat: The flip side is that your scores can suffer if the other person suddenly skips a payment or maxes out the card, so make sure you find someone you can trust to continue handling credit well.

Cheat No. 2: Make your credit card debt disappear (Option 1)

A big part of the FICO credit-scoring formula is credit utilization: how much of your available credit you're using at any given time. The formula is more sensitive to balances on your revolving accounts, such as credit cards, than it is to balances on your installment loans, such as mortgages, auto loans, student loans and personal loans. When it comes to credit cards, the less of your available credit you use, the better. Using less than 30% is good, less than 20% is better and less than 10% is best.

Calculator: When will your credit cards be paid off?
If you have big credit-card balances, consider paying them off or down with a fixed-rate personal loan from a bank or credit union. These loans, which typically last for three years, can not only help you get out of debt but can transform the nature of that debt in the eyes of credit-scoring formulas. A balance that is hurting your credit scores because it's on a credit card could be a neutral or even a positive factor in your scores if it were transferred to an installment loan.

Caveat: Lender policies differ, but not everyone will be able to qualify for a personal loan.

Cheat No. 3: Make your credit card debt disappear (Option 2)

If a personal loan isn't an option, you can consider paying off your cards with a loan from your 401k or other retirement plan. Retirement-plan loans typically don't show up on your credit reports and aren't a factor in your credit scores. As far as the credit bureaus are concerned, that debt just disappeared.

It didn't really, of course. You'll still owe the money, just to a different account. And retirement-plan loans are risky: If you lose your job, you may have to pay back any outstanding balance quickly, or the loan will turn into a withdrawal -- and that's very, very bad. Not only will a withdrawal trigger a hefty tax bill, but you'll lose all the future tax-deferred compounding that money could have earned. If you're in your 30s, a $10,000 withdrawal could cost you $100,000 or more in lost future retirement income. If you're in your 20s, you could be out $200,000 or more.

There's another downside: If you're in over your head with debt, your credit card bills could be erased in bankruptcy court. A retirement-plan loan isn't eligible for the same treatment. In essence, you're taking money that would be protected from creditors to pay a debt that would otherwise be wiped out.

Caveat: Consider a retirement-plan loan only if your job is stable and you're not a financial basket case.