Your credit score is more than just a number—it’s the key that unlocks financial opportunities like favorable interest rates, approval for loans, and even some job prospects. If you’re looking at a less-than-stellar score, you’re not alone. Millions of Americans struggle with credit challenges, but the good news is that improvement is possible and often faster than you might think.
Understanding what impacts your credit score is the first step toward improving it. Your payment history, credit utilization, length of credit history, credit mix, and new credit applications all play significant roles in determining that three-digit number. With strategic actions and consistent habits, you can see meaningful improvements in just a few months.
Check Your Credit Reports for Errors
Before making any changes to your financial habits, request copies of your credit reports from the three major bureaus: Experian, Equifax, and TransUnion. You’re entitled to one free report from each bureau annually through AnnualCreditReport.com. During the pandemic, weekly free reports became available, so check the current policy when you visit the site.
Once you have your reports, review them carefully for inaccuracies. Look for accounts you don’t recognize, incorrect payment statuses, or outdated negative information. Studies show that about 20% of consumers have errors on their credit reports that could affect their scores, so this step alone might boost your numbers significantly.
Dispute Credit Report Inaccuracies
If you find errors on your credit reports, dispute them immediately. Each credit bureau has an online dispute process that allows you to challenge incorrect information. Be specific about what information is wrong and why, and include supporting documentation whenever possible.
The bureaus typically have 30 days to investigate your claim and respond. If they confirm the error, they must correct it and notify all three bureaus. This process costs nothing but time and can potentially raise your score by dozens of points if significant errors are removed.
Pay Down Credit Card Balances
Your credit utilization ratio—the percentage of available credit you’re using—significantly impacts your score. Experts recommend keeping this ratio below 30%, but for the best scores, aim for less than 10%. High balances relative to your limits signal potential financial distress to lenders.
Focus on paying down credit card debt aggressively. If possible, make multiple payments throughout the month rather than waiting for the due date. This strategy, known as credit card surfing, can keep your reported balances lower since card issuers typically report balances to bureaus once per billing cycle.
Request Credit Limit Increases
Another effective way to improve your credit utilization ratio is by increasing your available credit. If you’ve been a responsible customer with a good payment history, consider requesting credit limit increases on your existing accounts.
When requesting higher limits, ask if the card issuer can approve your request with a soft credit inquiry rather than a hard inquiry. Soft inquiries don’t affect your credit score, while hard inquiries can temporarily lower it. A higher limit with the same balance instantly improves your utilization ratio.
Make Payments On Time, Every Time
Your payment history accounts for approximately 35% of your FICO score, making it the most influential factor. Even a single late payment can significantly damage your score and remain on your credit report for up to seven years.
Set up automatic payments for at least the minimum amount due to ensure you never miss a deadline. Better yet, pay your bills in full each month to avoid interest charges. If you’ve accidentally missed a payment, call your creditor immediately—they may be willing to waive the late fee and refrain from reporting the late payment to the credit bureaus, especially if you have a history of on-time payments.
Become an Authorized User
If a family member or close friend has excellent credit and a credit card with a positive payment history, ask if they would add you as an authorized user. This arrangement allows their card’s history to appear on your credit report, potentially boosting your score.
The ideal account would be one with a long history of on-time payments and low utilization. You don’t even need to use the card to benefit from this strategy—simply being associated with the account can help your credit profile.
Use a Secured Credit Card
If you have limited credit history or significant negative items, a secured credit card can help you rebuild. These cards require a security deposit that typically becomes your credit limit, reducing the risk for the card issuer.
Choose a secured card that reports to all three major credit bureaus and has a path to graduate to an unsecured card after demonstrating responsible use. Make small purchases and pay the balance in full each month to establish a positive payment history without incurring interest charges.
Consider a Credit-Builder Loan
Credit-builder loans are specifically designed to help people establish or improve credit. Unlike traditional loans, you don’t receive the money upfront. Instead, the lender deposits the “loan” amount into a secured account while you make payments over 6-24 months.
Once you’ve completed all payments, you receive the money plus any interest earned (minus fees). Throughout the loan term, the lender reports your payment activity to the credit bureaus, helping you build a positive credit history. These loans are available through credit unions, community banks, and online lenders.
Keep Old Accounts Open
The length of your credit history accounts for about 15% of your FICO score. Older accounts demonstrate your long-term ability to manage credit responsibly. Even if you rarely use certain credit cards, keeping them open can benefit your score.
If you’re concerned about inactivity fees or the card being closed due to lack of use, make a small purchase every few months and pay it off immediately. Set calendar reminders to ensure you don’t forget these maintenance charges.
Limit New Credit Applications
Each time you apply for new credit, the lender typically performs a hard inquiry on your credit report. These inquiries can temporarily lower your score by a few points and remain on your report for up to two years.
While a single inquiry has minimal impact, multiple inquiries in a short period can significantly affect your score. When shopping for specific types of loans like mortgages or auto loans, try to complete all applications within a 14-45 day window, as credit scoring models typically count these as a single inquiry when they recognize rate-shopping behavior.
Use Experian Boost or UltraFICO
Several newer programs allow you to improve your credit score by adding information not traditionally included in credit reports. Experian Boost lets you add utility payments, phone bills, and streaming services to your Experian credit report, potentially increasing your score immediately.
Similarly, UltraFICO considers your banking activity, including account balances and transaction history, to supplement traditional credit data. These services are particularly helpful for those with limited credit history or scores in the fair to good range.
Pay Off Collection Accounts
Collection accounts can severely damage your credit score and typically remain on your report for seven years. However, newer credit scoring models like FICO 9 and VantageScore 4.0 ignore paid collections, making this strategy more effective than in the past.
Before paying a collection, request debt validation to ensure the debt is legitimate and the collection agency has the right to collect. Once verified, consider negotiating a “pay for delete” agreement, where the collection agency removes the account from your credit reports in exchange for payment. Get any agreement in writing before sending payment.
Monitor Your Credit Regularly
Tracking your progress is essential when working to improve your credit score. Many credit card issuers offer free credit score monitoring, and services like Credit Karma provide regular updates and explanations of factors affecting your score.
Set up alerts for significant changes to your credit report, which can help you catch potential identity theft early. Remember that your score may fluctuate slightly from month to month, but focus on the overall trend rather than minor variations.
Be Patient and Persistent
While some credit improvement strategies can yield quick results, building excellent credit takes time. Most negative information remains on your credit reports for seven years, though its impact diminishes over time, especially when overshadowed by positive recent behavior.
Consistency is key—continue practicing good credit habits even after seeing improvement. The longer you maintain responsible credit behavior, the more resilient your score becomes to occasional missteps or financial challenges.