How to Improve Your Credit Score

Figuring out how to improve your credit score can feel overwhelming, especially if you’re starting from scratch or trying to bounce back from past mistakes. The good news is, there are practical steps you can take like paying bills on time, lowering your credit card balances, and avoiding new debt, that can make a real difference.

The first step is to understand what influences your credit score. Knowing the important elements makes it simpler to make a strategy that works for your financial circumstances and take significant action to improve your credit.

A credit score is a three-digit number that reflects how reliable you are when it comes to managing credit. It’s based on details from your credit report, such as your history with credit card issuers, banks, and other lenders. Your score helps lenders, landlords, and even some employers assess how likely you are to repay debts on time.

A credit score is a vital number that shows how responsible you are with credit. It plays a major role in determining even if you’ll be approved for loans, credit cards, or a mortgage and at what interest rate. One of the most commonly used models is the FICO® score, which ranges from 300 to 850. The higher your credit score, the more favorable your borrowing terms, which can save you thousands of dollars over time.

The average credit score in the U.S. is around 718. A score of 760 or above typically qualifies you for the best rates available.

Credit Score Ranges and What They Mean

Related: What Credit Score is Needed for a Personal Loan?

An essential first step in controlling your financial well-being is being aware of your credit score. Thankfully, there are a few easy methods to verify it:

1. Review your credit card or loan statements – Many banks and lenders now include your credit score for free on monthly statements or through online accounts.
2. Speak with a credit or housing counselor – Certified counselors can often help you access your score as part of a free or low-cost financial review.
3. Use a credit score service – Several online platforms offer access to your score, sometimes at no charge, along with helpful monitoring tools.
4. Purchase directly from a credit bureau – You can buy your credit score from major reporting agencies like Equifax, Experian, or TransUnion if it’s not available through other means.

Your credit score is influenced by several key factors. As scoring models like FICO and VantageScore use slightly different calculations, they generally consider the same five elements. Below are the most recent FICO guidelines:

Payment history – 35%
Your track record of paying bills on time carries the most weight.

Credit utilization – 30%
This looks at how much of your available credit you’re currently using.

Length of credit history – 15%
The longer you’ve had credit accounts open, the better it can be.

New credit activity – 10%
Applying for multiple new credit lines in a short span can have an impact.

Credit mix – 10%
A variety of credit types, like credit cards and loans, can work in your favor.

Making sensible financial decisions and establishing better credit depend heavily on understanding how these variables interact.

You may have a low credit score because of mistakes you’ve made or because you’re just starting out and don’t have much credit history. Here are seven ways to improve your credit score, regardless of the cause.

1.Pay Your Bills on Time

Credit impact: 35% of your FICO® Score
Your payment history has the biggest influence on your credit score. It reflects how reliably you pay your debts, covering on-time, missed, and late payments, and is reported to credit bureaus like Experian, Equifax, and TransUnion. Staying on schedule with your payments is one of the best ways to improve your credit over time.

What you can do:

If staying current is a challenge, consider enabling automatic payments for at least the minimum amount due. Set reminders through your banking app or calendar to avoid missing deadlines. You can also explore services like Experian Boost®, which allow you to add recurring bills such as rent, utilities, or streaming subscriptions to your credit history.

Timeframe:
Timely payments will steadily help lift your score. However, a late payment that’s 30+ days overdue could stay on your credit report for up to seven years. While it may affect your score initially, consistent on-time payments can gradually offset that damage.

2. Reduce Balances on Credit Cards

Credit impact: 30% of your FICO® Score
The total amount you owe, especially on revolving accounts like credit cards, is the second most important factor. A major element here is your credit utilization ratio, which is the percentage of your available credit you’re using. Keeping it low can lead to better scores.

What you can do:

If you carry high balances, work toward reducing them. Some options include:

• A debt consolidation loan
• A balance transfer credit card
• A structured repayment method like the snowball or avalanche method
• A debt management plan

Even if you pay your cards in full each month, consider making an early payment before your statement closes or splitting payments throughout the billing cycle to maintain a lower utilization rate.

Timeframe:
Most credit card issuers report account activity once per billing cycle, so your efforts to lower balances may show results within a few months.

3. Keep Longstanding Accounts Open

Credit impact: 15% of your FICO® Score
The length of time you’ve had credit plays a key role in your score. This includes how old your oldest account is and the average age of all your credit lines. While loans are usually closed once repaid, credit cards can stay open indefinitely, and doing so can work in your favor.

What you can do:
Try to keep older credit cards active by making small purchases occasionally or using them to pay recurring bills. If the card charges a fee or no longer meets your needs, ask your card issuer about options to switch to a more suitable card without closing the account.

Timeframe:
Credit history builds over many years, but opening new accounts or closing old ones can quickly affect your average account age and your score.

4. Maintain a Mix of Credit Types

Credit impact: 10% of your FICO® Score
A healthy credit profile often includes a mix of credit types, like installment loans (auto, mortgage, personal) and revolving credit (credit cards). This mix shows lenders you can handle different kinds of borrowing responsibly.

What you can do:
A diverse credit mix often develops over time as you borrow to meet financial needs. If you’re new to credit, consider starting with a secured credit card and a credit-builder loan. Just avoid opening new accounts solely to diversify, only borrow when it makes sense for your situation.

Timeframe:
Adding variety to your credit accounts is a long-term process. There’s no need to rush, focus on thoughtful borrowing as needed.

5. Be Selective About Applying for New Credit

Credit impact: 10% of your FICO® Score
Each time you apply for credit, a hard inquiry is added to your report. While one or two inquiries may have a small effect, several in a short time can lower your score and signal potential risk to lenders.

What you can do:
Limit new applications to when you truly need credit. Many lenders offer prequalification tools that use a soft inquiry to estimate your approval chances without affecting your score. If you’re shopping for a loan, do so within a brief window, as credit scoring models often count multiple inquiries for the same loan type as one, if made within 14 to 45 days.

Timeframe:
Hard inquiries remain on your credit report for two years, but they only influence your score for up to 12 months.

6. Review and Correct Errors on Your Credit Report

Credit impact: Can be significant depending on the error
Mistakes on your credit report, like incorrect late payments or accounts you didn’t open, can unfairly damage your score. Identity theft can also lead to unauthorized activity appearing on your credit file.

What you can do:
Check your credit reports from Experian, Equifax, and TransUnion. You’re entitled to free weekly reports from AnnualCreditReport.com. If you spot errors or suspicious activity, file a dispute directly with the credit bureau to have the item reviewed and corrected if needed.

Timeframe:
Credit bureaus typically resolve disputes within 30 days. If the issue is verified as inaccurate, it will be corrected or removed, potentially giving your score a lift.

7. Consider Becoming an Authorized User

Credit impact: Can offer a quick boost for limited or poor credit
If you’re just starting to build credit or recovering from past challenges, being added as an authorized user on someone else’s credit card can help. The card’s history may be added to your credit report, depending on the issuer.

What you can do:
Ask a family member or trusted person to add you as an authorized user on a card with a strong payment record and low balance. You don’t even need to use the card, just being listed can positively influence your score.

Timeframe:
Once you’re added, the account typically appears on your credit report within one or two billing cycles, and you may see changes in your score soon after.

The timeline for improving your credit score depends on your unique financial situation. While some progress can happen within a few months, especially with consistent effort, significant changes often take longer and require patience.

Certain negative marks are easier to recover from than others. For instance, a single late payment or a few credit inquiries may have a minor, short-term impact. On the contrary, more serious issues, like a collection account or a foreclosure, can take longer to overcome.

In general, late payments and similar negative entries can remain on your credit report for up to seven years. If you’ve filed for Chapter 7 bankruptcy, that may stay on your record for up to 10 years.

The most important lesson? It takes time and constant effort to improve your credit score. Although there isn’t a magic formula or one-size-fits-all method to raise your score overnight, you can always become better with dedication and wise practices. 

Starting out without any credit can feel like a catch-22; you need credit to get credit. But don’t worry, there are several effective ways to kickstart your credit journey.

Apply for a secured credit card. This option involves opening a savings account and putting down a deposit that acts as collateral for your credit limit. You can spend up to a certain portion of that deposit. Making on-time payments each month helps establish your credit record because these activities get reported to credit bureaus.

Find a co-signer. A parent, grandparent, or guardian who has strong credit may co-sign your loan application or credit application. Remember that you are both accountable for the debt and that your credit practices will have an impact on each other’s credit reports.

Become an authorized user. Another way to build credit is by becoming an authorized user on a trusted family member’s or friend’s credit card. This means their positive credit history reflects on your credit profile, helping you build credit without having to use the card yourself. For example, many parents add their college-going kids as authorized users to give their credit a boost.

Check out these useful resources from Equifax if you want to learn more about credit scores, reports, and credit history: 

What to Do If Your Credit Application Is Denied. Learn the common reasons lenders may turn down your credit request and discover practical steps to take if you face a denial.

How Can I Check My Credit Scores? Check the different ways to access your credit score and understand the key details that affect it.

Why Do Credit Scores Change Over Time? It’s normal for credit scores to go up and down. Find out what causes these fluctuations and how to keep your score steady.

7 Actions That Don’t Affect Your Credit Scores. Not every financial move impacts your credit. Learn which ones are safe and won’t lower your score.

Does Medical Debt Affect Your Credit Score? Understand how medical bills might show up on your credit report and influence your score.

What Details Are Included in a Credit Report? Get to know the important information found in your credit report and why it’s essential to review it regularly.

The fastest way to boost your credit score is by consistently paying your bills on time and reducing the balances on your credit cards. Credit card companies report your payment activity to credit bureaus roughly every 30 days, so making these positive changes can lead to noticeable improvements in your credit fairly quickly.

Boosting your credit score by 100 points in just one month is challenging, and there’s no guaranteed quick fix. Building strong credit usually requires patience and steady effort over time. However, if you’re new to credit or your current score is in the “fair” or “poor” range, you may be able to see more significant improvements faster than someone with an already solid credit history.

There are a few key actions that might help speed up the process. Focus on paying down credit card balances to lower your credit utilization ratio, since high balances can drag your score down. Always make on-time payments; late or missed payments can seriously hurt your score and undo progress. You can also avoid applying for new credit frequently, as too many inquiries can lower your score temporarily.