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7 Ways to Improve Your Credit Score

Rebecca Lake • June 28, 2023

Wondering how to improve your credit score? We'll walk you through how your score is calculated and what you can do to raise it, like making on-time payments and fixing errors on your credit report.

What are the best ways to improve your credit score?
The best ways to improve your credit score are to make on-time payments every month, keep your credit utilization low (don’t max out your credit cards), and monitor your credit reports regularly for errors.

A good credit score makes it easier to borrow money when you need it. Knowing how to improve your credit score — and taking the necessary steps to do so — can make it easier when you need to borrow money down the road.

Not sure how to increase your credit score? We’ve compiled some of the best strategies for improving your credit, whether you’re just starting or repairing your credit from recent setbacks.

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How are credit scores calculated?

Before you can understand how to improve your credit score, you’ll need a better idea of how credit scores are calculated in the first place.

Lenders use your FICO® score in about 90% of crediting decisions.1 Other scoring companies have different algorithms to calculate your score, but they’re similar enough to FICO’s that your strategy for improving your score should apply no matter which one lenders use.

FICO considers five key factors when calculating your score2:

  1. Payment history (35% of your score): This measures how well you pay back what you borrow. Missed and late payments will decrease your score; regular on-time payments will raise it.
  2. Amounts owed (30% of your score): This refers to your credit utilization. Borrowing all the money available to you (for instance, maxing out a credit card) can bring your score down. Try to keep your credit utilization below 30%.
  3. Length of credit history (15 of your score): Time heals everything, including your credit score. As your credit history ages – and you’ve demonstrated over the years that you’re a responsible borrower – you can expect your score to improve.
  4. Credit mix (10% of your score): Having a healthy mix of different types of credit – mortgages, car loans, student loans, credit cards – can be helpful for your credit score.
  5. New credit (10% of your score): If you open multiple lines of credit in a short timeframe, your score may temporarily go down. Be strategic about what accounts you open – and when.
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7 best ways to improve your credit score

Are you wondering how to increase your credit score? We’ve put together seven helpful strategies that can lead to improvements over time.

1. Automate and make bill payments on time

Payment history accounts for the largest share of your credit score. Make on-time bill payments your top financial priority if you’re improving your credit score.

Here are some ways to ensure your accounts stay up-to-date and in good standing:

  • Set up automatic payments: Setting up automatic payments for the minimum amount due every month ensures you won’t miss a payment. Late payments can stay on your credit report for up to seven years.3
  • Address missed payments: If you miss a payment, pay it as soon as you can. Then call the credit card company and ask if they’ll consider not reporting the missed payment to the credit bureaus.
  • Stay on top of other accounts: Keep close tabs on other accounts, even if they don’t usually appear on your credit reports, such as gym memberships and subscription services. If you don’t keep up with payments, the account could be sent to collections – and that will show up on your credit report.

2. Pay balances strategically

When determining how to boost your credit score, you can try one of several popular debt payment strategies, including the 15/3 method, the debt snowball method, and the debt avalanche method.

  • 15/3 credit card payment strategy: You’ll make two payments each month – one 15 days before the credit card statement date and another three days before. This helps keep your credit utilization down ahead of the statement date when creditors typically report your utilization to the bureaus.
  • Debt snowball method: This strategy can help when juggling multiple debts. You’ll make minimum payments on all your debts, but then you’ll throw all your extra money at the smallest debt until you’ve knocked it out. Then you’ll focus on the next smallest and so on until you’re tackling your largest debt. The early victories can boost your morale and keep you on track to pay off your debt.
  • Debt avalanche method: The debt avalanche method may not have little victories up front, but it can save you money in the long run. This strategy focuses on wiping out the debt with the highest interest rate first, then working your way down to the lowest-interest debt.

These aren’t the only three strategies for paying off debt but are among the most popular. What’s most important is finding a system that works for you – and sticking to it.

3. Increase your credit limits

Paying down your balances can free up available credit and improve your credit utilization. But debt payoff takes time.

Bumping up your credit card limits is a faster way to decrease your credit utilization. Your utilization goes down as your credit limit goes up but your balance stays the same. This can improve your credit score significantly.

So how can you increase your credit limits? Just ask!

If you land a new job, get a promotion, or add more income through a side gig, ask your credit card issuers about a higher limit. You can also do this after several years of positive credit experience.

Chime Tip: While increasing your credit limit can be helpful, you can still work on your credit utilization by simply spending less with your credit card. A good rule of thumb is to keep your credit card utilization at 30% max.

For example, if your credit limit is $1,000, your total balance shouldn’t exceed $300 at any given time. If you hit $300, pay it off – even if the balance isn’t due yet – before using the card again.

4. Sign up for free credit monitoring

Credit monitoring services can help you keep tabs on your credit history as you work toward improving your score.

Companies like Credit Karma and Credit Sesame offer this service for free. Chime members can monitor their FICO score in the Chime app.

You can also request a free credit report every 12 months from the three major credit bureaus.

Monitoring your credit allows you to spot and dispute errors and potential fraud. While credit monitoring services can’t prevent identity theft, they can keep you informed to take action if you notice something is wrong.

And don’t worry: checking your credit score doesn’t lower it.

5. Dispute credit report errors

Credit bureaus collect your information from companies where you have open accounts, such as banks, credit card issuers, retailers, car and mortgage lenders, and even utility companies. These bureaus do their best to get it right, but everyone makes mistakes.

34% of people have an error on their credit report.4 Some errors – like incorrectly reported balances or inaccurate gaps in your payment history – can hurt your score significantly.

Find an error on your credit report? Follow that credit bureau’s steps for filing a dispute (and check your other reports to see if the same error appears there). Credit bureaus have 30 days to investigate disputes after you file.5

Still need help? The Federal Trade Commission has a guide for disputing credit report errors.

6. Don’t close old accounts

If you’ve successfully paid off one or more of your credit cards, you’ve earned the right to a victory dance.

But don’t close the account when you’re done dancing. In fact, keep it open for as long as you can — just don’t spend with the account.

Why? The length of your credit history and the ages of your different accounts affect your credit score. Typically a longer credit history results in a higher score.

Plus, leaving a card open – and rarely using it – helps lower your credit utilization and boost your score.

Pro Tip: Some credit card companies may close cards due to inactivity. Use your old credit card once or twice a year for something small, like a pack of gum, then pay it off immediately to avoid interest.

7. Use a secured credit card

Establishing and building credit can feel like a catch-22 when you’re just getting started.

After all, responsible credit card management is one of the easiest ways to improve your credit score. But you often need a decent credit score to qualify for a credit card to begin with.

So how can you get a credit card to start building your credit? A secured credit card might be the right path. This type of card requires you to make a cash deposit that serves as collateral for the account. This reduces the risk for the credit card company, which means people with low or no credit can usually qualify.

Use this credit card responsibly for several months: Make on-time payments and keep the utilization low. Over time, your score should improve, and you may be able to qualify for a credit card with a higher limit and no security deposit.

Why improving your credit score matters

Having a good credit score makes it easier to borrow money when you need it. That could mean getting a mortgage or car loan, taking out a personal loan to cover an emergency, and earning some cash back or travel rewards.

Actively working on your credit score means you’ll have access to credit when you need it and at more affordable rates. Check out our guide to credit score ranges to understand what your current score means – and how improving your score might make future borrowing a little easier.

FAQs

Why should I inquire about new credit or loans within the same month?

Applying for new credit results in a hard inquiry on your credit report – and multiple hard inquiries can lower your credit score and send red flags to creditors. By shopping for loans and new lines of credit within 30 days of each other, you usually avoid multiple credit hits.

Does opening new accounts affect my credit score?

Opening a new credit account can cause your credit score to decrease a bit. When you first apply for the account, it will result in a hard inquiry on your credit report, which will temporarily lower your score.

But don’t worry: It’s not a huge impact, and your score can bounce back quickly – especially if you responsibly manage the new account.

How fast can I raise my credit score?

Wondering how to raise your credit score quickly? Paying bills on time and using less of your available credit limit on cards can potentially raise your credit in as little as 30 days.6

However, due to reporting lags, it could take a few months for credit reports to reflect your work.

How can I raise my credit score in 30 days?

You can raise your credit score in 30 days by making on-time payments for all your accounts and reducing your credit utilization. You can decrease your utilization by:

  • Spending less with your credit card
  • Increasing your credit limits
  • Making extra payments on outstanding debts

What is the fastest way to boost my credit score?

You may be able to boost your credit score quickly by requesting a credit limit increase – but not spending up to this new limit. This will lower your credit utilization, which can increase your score.

You can also improve your credit score by making larger payments on existing debt. This also reduces your credit utilization.

Improving your credit score is not a sprint. Improving your score takes time. Pay your bills on time every month, be strategic when opening new accounts, and never borrow more than you need. Over time, your score should improve.

What are 3 ways to increase your credit score?

Wondering how to improve your credit score? Three easy strategies include:

  1. Making on-time payments for all your bills. Set up automatic payments if you’re worried you’ll miss any.
  2. Keep your credit utilization low. Never spend more than 30% of your credit card limit, and pay your credit card bill in full every month. Keeping your credit utilization low is a surefire way to improve your credit score.
  3. Review your credit reports. Errors on your credit report could be bringing your score down. Review yours regularly to ensure all the information is correct and dispute errors promptly.

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1 FICO® Scores are developed by Fair Isaac Corporation. The FICO Score provided by ConsumerInfo.com, Inc., also referred to as Experian Consumer Services ("ECS"), in Experian CreditWorks℠, Credit Tracker℠ and/or your free Experian membership (as applicable) is based on FICO Score 8, unless otherwise noted. Many but not all lenders use FICO Score 8.

In addition to the FICO Score 8, ECS may offer and provide other base or industry-specific FICO Scores (such as FICO Auto Scores and FICO Bankcard Scores). The other FICO Scores made available are calculated from versions of the base and industry-specific FICO Score models. There are many different credit scoring models that can give a different assessment of your credit rating and relative risk (risk of default) for the same credit report. Your lender or insurer may use a different FICO Score than FICO Score 8 or such other base or industry-specific FICO Score, or another type of credit score altogether. Just remember that your credit rating is often the same even if the number is not.

For some consumers, however, the credit rating of FICO Score 8 (or other FICO Score) could vary from the score used by your lender. The statement that "90% of top lenders use FICO Scores" is based on a third-party study of all versions of FICO Scores sold to lenders, including but not limited to scores based on FICO Score 8. Base FICO Scores (including the FICO Score 8) range from 300 to 850. Industry-specific FICO Scores range from 250-900. Higher scores represent a greater likelihood that you'll pay back your debts so you are viewed as being a lower credit risk to lenders. A lower FICO Score indicates to lenders that you may be a higher credit risk.

There are three different major credit reporting agencies — the Experian credit bureau, TransUnion® and Equifax® — that maintain a record of your credit history known as your credit report. Your FICO Score is based on the information in your credit report at the time it is requested. Your credit report information can vary from agency to agency because some lenders report your credit history to only one or two of the agencies. So your FICO Score can vary if the information they have on file for you is different. Since the information in your report can change over time, your FICO Score may also change.

Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn More

2 Information from myFICO's "What's in my FICO Scores?" as of June 5, 2023:https://www.myfico.com/credit-education/whats-in-your-credit-score

3 Information from Equifax's “How Long Does Information Stay on My Equifax Credit Report?" as of June 5, 2023: https://www.equifax.com/personal/education/credit/report/how-long-does-information-stay-on-credit-report

4 Information from Consumer Reports' “More Than a Third of Volunteers in a Consumer Reports Study Found Errors in Their Credit Reports" as of June 5, 2023:https://www.consumerreports.org/credit-scores-reports/consumers-found-errors-in-their-credit-reports-a6996937910/

5 Information from the Consumer Financial Protection Bureau's “Ask CFPB" as of June 5, 2023: https://www.consumerfinance.gov/ask-cfpb/if-a-credit-reporting-error-is-corrected-how-long-will-it-take-before-i-find-out-the-results-en-1339/

6 Information from Experian's “How to Improve Your Credit Score in 30 Days or Less" as of June 5, 2023: https://www.experian.com/blogs/ask-experian/how-to-improve-your-credit-score-in-30-days/

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