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Smart Money

How to Improve Your Credit Score in 7 Steps

Working to improve your credit score is one of the best actions you can take to better your finances. It’s wise to invest your time and energy into learning how to raise your score, as there are several ways to bring it up fast.

Rebecca Lake • October 21, 2022

In This Article

  1. How to raise your credit score
  2. 7 best ways to improve your credit score
  3. FAQs
  4. Final thoughts: Improving your credit score isn’t complicated

Before you’re able to boost your credit score, it’s important to understand the factors that influence it:

  • Payment history
  • Credit utilization
  • Length of credit history age
  • Types of credit on your credit report
  • Credit inquiries

In the U.S., many lending institutions rely on FICO®​ Scores and VantageScores®​ to obtain people’s credit scores. Lenders use an individual’s credit score to assess the risk associated with loaning them money. Ninety percent of top lenders use FICO®​ Scores to determine whether or not someone meets lending criteria.

Your credit score affects what loans or credit cards you qualify for and your associated interest rates. A good credit score will likely translate to a larger borrowing capacity and lower interest rates on the amount borrowed.

While it may seem like there’s a lot involved with reaching a good credit score, it’s not that complicated, and anyone can improve their score with a little bit of patience, planning, and discipline.

How to raise your credit score

Now that you’re aware that a higher credit score can make it easier for you to get a loan or borrow money at a better interest rate, you might be wondering how you can improve your score. There are several steps you can take, and most you can start today!

It may seem intimidating to try all of these strategies at once, but take it one step at a time and implement a couple to just get started. Over time, you can take on additional methods that will continue to gradually raise your credit score. 

A good FICO® Score range to aim for is anywhere between 670 and 800+. If your score isn’t in this range, here are several strategies to get it there.

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7 best ways to improve your credit score

1. Automate and make your bill payments on time

Payment history accounts for the largest share of your credit score, so it’s extremely important to always pay your bills on time, avoid missing payments, and stay on top of all of your accounts. 

Here are some tips you can take action on immediately to ensure your accounts stay up to date and remain in good standing:  

  • Set up automatic payments: Setting up automatic payments for the minimum amount due every month can help you avoid missing one, as late payments are no fun to deal with and can stay on your credit report for up to 7 years.
  • Address missed payments: If you do miss a payment, you can call the credit card company right away. Make the payment as soon as you can, and ask the creditor if it will consider not reporting the missed payment to the credit bureaus
  • Stay on top of other accounts: Keep close tabs on your other accounts that don’t usually appear on your credit reports, such as gym memberships and subscription services. Keep making those monthly payments as well to avoid having an account be sent to collections, as it will cause your score to drop. 

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2. Pay balances strategically

A popular approach is the 15/3 credit card payment strategy. This involves making 2 payments per month toward your credit card or debt. 

You make one payment 15 days before your credit card statement date and the second one 3 days before it. Your statement date is the last day of your credit card billing period, which is when your card issuer will usually send you a summary of your activity and your current balance due. 

By doing this, it tells the credit reporting companies that you made 2 payments toward your balance in 1 month, which helps reduce the reported amounts that you owe. It more clearly reduces your credit card utilization ratio, as credit card companies typically report it on your statement date to the credit bureaus. This method encourages low balances on the statement date. 

Although this trick isn’t foolproof, some people have seen great success with this method, and if all else fails, at least you’re working to pay down your balance every month!

Another strategic way to tackle your credit card balances and raise your score is by exploring the debt snowball vs. avalanche methods. The debt snowball method is when you pay off your debts from smallest to largest, and the avalanche method focuses on paying the loan with the highest interest rate first. 

Again, either way, you’re working toward becoming debt-free and improving your credit score. The first step is choosing a method that works for you and running with it!

3. Increase your credit limits

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

Bumping up your credit card limits may be is a faster way to see a potential credit score improvement. As your credit limit goes up and your balance stays the same, it instantly lowers your overall credit utilization, which can improve your credit score. 

Here are some ways to increase your credit limits and use this tip effectively:

  • Ask for a higher limit: If you land a new job or a promotion and are earning a higher income, you can inquire with your credit card issuers about a higher limit. You can also do this once you add more years of positive credit experience to your report.
  • Follow the 30% or less rule: The trick is to avoid charging up to your new credit limit and to remember the 30% or less rule. This means you should try and keep your total credit utilization rate below 30%. For example, if your credit limit is $3,000, your total balance shouldn’t exceed $900 at any given time, unless you can pay the balance off in full by the end of the month.
  • Avoid overspending: Generally, a low credit utilization ratio is an indicator that you’re doing a good job of managing your credit responsibilities since you aren’t overspending. A higher rate, however, could be a red flag for future lenders or creditors that you’re having trouble managing your finances, so try sticking to a budget to help keep your money in line. Before asking for a credit increase, make sure you won’t be tempted to spend more than you can afford.

4. Sign up for free credit monitoring

Free credit monitoring services, like those offered by Credit Sesame and Credit Karma, can help you keep tabs on your credit history as you work toward improving your score. You can also get a free credit report every 12 months from the 3 major credit bureaus at Annual Credit

Monitoring your credit can help inform you of errors or inaccuracies on your credit report. Credit monitoring services can also alert you of potential fraud on your credit report, so you can take the necessary steps to protect your finances and personal information. While these services can’t actually prevent identity theft, they can keep you informed to take action if you notice something is wrong.

5. Dispute credit report errors 

An incorrectly reported balance or inaccurate gaps in your payment history can hurt your score in a big way. The 3 credit reporting agencies are Experian, TransUnion, and Equifax. They collect your information from companies where you have open accounts. This includes banks, credit card issuers, retailers, car and mortgage lenders, and even utility companies. 

The credit reporting agencies operate to collect correct information; however, sometimes, they’re unsuccessful. A Consumer Reports study showed that 34% of participants found at least one error on their credit reports. 

Follow this process if you find an error on your report:

  1. Check your report for mistakes: You should always check your report for mistakes, such as payments marked as late when you paid on time, someone else’s credit activity listed as your own, or negative information that’s outdated.
  2. File a dispute: Once you’ve identified an error, federal law lets you dispute the mistake with the right credit reporting agency. After you report an error, the credit bureaus have 30 days to investigate the matter and respond. 
  3. Be careful of scams: Some companies offer to dispute errors for you to quickly improve your credit, but be mindful of offers that are too good to be true.

Overall, removing errors from your credit report can get you a lot of well-deserved points back to your credit score. 

If you’re not sure where to start with a credit report dispute, the Federal Trade Commission has a handy guide you can follow.

6. Don’t close old accounts

If you’ve successfully paid off one or more of your credit cards, you’ve definitely earned the right to a victory dance. But don’t close your account down completely. The length of your credit history affects your score considerably, along with the ages of your different accounts. Typically a longer credit history results in a higher score. 

Here are some things to keep in mind:

  • Keep old accounts open: Some credit card issuers close accounts due to inactivity. This can happen with older accounts that people no longer use. However, some of those accounts may play an important role in your credit history and credit score. If you want to keep a credit card open, put a small recurring or automated purchase on it and pay it off each month.
  • Maintain old accounts instead of opening new ones: If you end up needing a credit card down the road after closing all your old accounts, you would need to apply for a new one, which could hurt your score since inquiries for credit shave off a few points each time. Additionally, since one of the factors that affect your credit score is credit age, the longer you keep your account open, the more you’ll appear as a seasoned credit card holder. 

7. Use a secured credit card

Another way to improve your credit is to use a secured credit card. This type of card requires you to offer up a cash deposit as collateral when the account is first opened. 

Here’s a few reasons why secured credit cards help improve your credit.

It’s easier to qualify for a secured credit card.

The deposit on a secured credit card is an insurance policy for the credit card company in case you can’t make your payments or pay back the balance. Since the deposit reduces the risk to the card issuer, it’s easier to qualify for secured cards, making them an ideal tool for people looking to start fresh with their credit. 

On-time payments help build credit.

On-time payments are also a great way to add more positive credit history to your report. It’s best to look for a secured card that reports your credit activity to all 3 major credit bureaus. 

The goal here is not just having another card but having one that reports consistent good credit habits to improve your depth of credit. Using a secured credit card is a quick and easy way to build credit as long as you’re smart about how you use it.

Check out Chime Credit Builder.

If you’re looking to boost your current score a bit, explore the benefits of the Chime Credit Builder Visa® Credit Card¹

With no annual fee and no interest, this secured credit card helps you build your credit over time. The consistent use of Credit Builder can help you build payment history and increase the length of your credit history². 

Pro Tip

When applying for a new credit card, ask the credit card company if you can avoid a hard inquiry so that your score doesn’t take a hit.


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

It’s best practice to shop for loans, new lines of credit, or anything that involves an interest rate within the same time frame. Several hard inquiries can negatively impact your credit score, so if you shop for rates within 30 days of each other, you usually avoid multiple credit hits.

Does opening new accounts affect my credit score?

Like any change to your credit history, opening a new account can cause your credit score to decrease a bit. When you first apply for the account, an inquiry will pop up on your credit report. Because that inquiry shows a new debt, you may see a slight dip in your credit score that will bounce back over time.

How fast can I raise my credit score?

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. However, due to reporting lags, it could take a few months for your good work to be reflected on your credit report.

Final thoughts: Improving your credit score isn’t complicated

Raising your credit score doesn’t involve any secret formulas or hacks. It’s all about patience and knowledge. As you work to improve your credit, you’ll start to save money and be able to take advantage of more opportunities. By following the tips here, you can put positive habits into regular practice and watch your credit score improve over time.

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1 To be eligible to apply for Credit Builder, you need to have received a qualifying direct deposit of $200 or more to your Checking Account within the last 365 days of your application. The qualifying direct deposit must have been made by your employer, payroll provider, or benefits payer by Automated Clearing House (ACH) deposit. Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, and cash loads or deposits are not qualifying direct deposits.

2 On-time payment history can have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.

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