How to Increase Your Credit Score

Payment history accounts for the largest share of your credit score. Make on-time bill payments your top financial priority for 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. Remember, late payments can stay on your credit report for up to seven years.¹
• 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 your other accounts, even if they don’t usually appear on your credit reports. This includes everything from gym memberships to subscription services. If you don’t keep up with your payments, the account could be sent to collections. That can have a negative impact on your credit report.

Debt payment strategies that can help boost your credit score include the 15/3 method, the debt snowball method, and the debt avalanche method.

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

• 15/3 credit card payment strategy: You’ll make two payments each month – one 15 days before the credit card statement due date, and another three days before the bill must be paid. This helps keep your credit utilization down ahead of the statement date, which is 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 allocate all your extra money to pay down the smallest debt until you’ve eliminated it. Then you’ll focus on the next smallest debt until you ultimately tackle your largest debt. The early victories can boost your morale and keep you on track to pay off your debts.
• Debt avalanche method: The debt avalanche method can save you money in the long run. This strategy focuses on wiping out your debt with the highest interest rate first, then working your way down to the lowest interest debt.

Paying down your balances can free up available credit and improve your credit utilization. But that process takes time. Increasing 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 your lender. If you land a new job, get a promotion, or add more income through a side gig, ask your credit card issuers for a higher limit. You can also do this after several years of positive credit experience.

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.

Credit monitoring services can help you keep tabs on your credit history as you work toward improving your score. Some companies offer this service for free. Chime members also can monitor their FICO score in the Chime app.

You can request a free credit report every 12 months from each of 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 enable you to take action if you notice something is wrong. And don’t worry: checking your credit score doesn’t lower it.

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 mistakes are possible.

In fact, over one-third, 34%, of people have an error on their credit report.² 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. Also, check the other credit bureau reports to see if the same error appears. Credit bureaus have 30 days to investigate disputes after you notify them.³

Need more help? The Federal Trade Commission has a guide for disputing credit report errors.

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 use 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 that can 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.

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. The catch is that you need a decent credit score to qualify for a credit card to begin with.

So how to build credit? A secured card can help. 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 often 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.

Understanding how credit scores are calculated will help you improve your score. Lenders use your FICO^® score in about 90% of credit decisions.⁴ 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 score⁵:

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, while 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 — like 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 demonstrate 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 time frame, your score may temporarily go down. Be strategic about what accounts you open – and when.