How to Raise Debt

Debt can be a valuable tool when used to acquire major, necessary items such as an automobile. Credit scores are based on debt and the repayment of debt. Individuals can then use their elevated credit scores to invest in higher-value debts, such as mortgages and student loans. Business start-ups frequently require a large amount of initial debt for to use as capital to fund the company. Consumers can raise debt to increase their credit score, but be careful: too much debt can cripple your finances, leading to hundreds or thousands of dollars in repayment and interest bills.

• 1

  Open a new credit card and use it to make purchases. Utilization of available credit is a major component of a credit score, but be careful to avoid over-using the card, which worries lenders. Keep the balance available between 30 and 50 percent of the available total to maintain a healthy debt-to-credit ratio. Avoid having more than two or three cards open at once.

• 2

  Utilize payday loan services if any are available in your area. Avoid using this option too often to cut back on the hefty fees and interest percentages associated with these loans.

• 3

  Secure a personal or business loan. Contact a bank or credit union and ask to borrow a set amount of money. Depending on your history with the institution and your credit score, the bank will approve or deny the loan request. Offer a physical asset, such as your house or an automobile, if necessary, to be approved for the loan. Expect high interest rates on most personal loans.

• 4

  Approach the U.S. Small Business Administration for loans when starting a small business. Bring your business plans and forecasts and any other necessary documents when meeting loan officers. Prove to them that your business can make a profit. Interest is often delayed or at a lower rate than through a typical bank.

• 5

  Contact a bank or credit union and ask them to finance the purchase of an automobile. Automobile loans typically carry a better interest rate than personal loans as the car itself is considered collateral.

• 6

  Purchase a house through a bank. Acquire a mortgage to affect both your debt and your credit score enormously. Avoid making late mortgage payments, which can quickly lower your credit score.