How to Improve Your Credit Score: 6 Actions That Would Help You Boost Your Credit History

Writer:

Jim Hughes

Editor:

Ana-Maria Sanders

Reviewer:

Sophia Rodriguez

Improving your credit score can unlock better financial opportunities, from qualifying for loans to securing lower interest rates on credit cards. By understanding the factors affecting your score and implementing actionable tips, you can take control of your financial future and boost your credit effectively. This guide will provide strategies to build your credit score fast and ensure lasting results.

A good credit score tells lenders you are responsible with your finances, which means you will likely receive significant financial benefits, such as a mortgage or a car loan. Improving your credit takes time, but tiny, consistent efforts will result in big payoffs later.

The first step is to check your score online to see what factors hold you back. Knowing the problem allows you to make targeted changes, such as reducing credit utilization or disputing errors on your credit report. Once these adjustments are made, creditors will gradually reflect the improvements in your score.

What Is a Credit Score and Why Is It Important for You?

A credit score is a three-digit number that shows your creditworthiness and financial history. It helps lenders assess the probability of you repaying borrowed money, determine whether to approve a loan or credit card application and determine the interest rates that will apply. 

A good credit score opens up better financial opportunities, such as lower interest rates and higher credit limits, while a poor score may lead to loan denials or expensive terms. Understanding your credit score is essential for managing your financial health and achieving long-term goals like buying a home or securing a car loan.

Credit Score Ranges and What They Mean

Credit scores typically fall within the following ranges:

Knowing where you fall in these ranges can help you identify areas to improve and take steps toward increasing your credit score.

6 Best Ways to Increase Credit Score

From paying your bills on time to diversifying your credit, here are six methods you can implement to get your credit score up.

1. Pay Your Bills on Time

 Lenders review your credit score to see your eligibility for a loan. Your credit score will increase if you are responsible and pay on time. This includes car payments, student loans, and any significant credit card debt you may have. 

You can automate your payments by setting up autopay or setting reminders to make monthly payments. This will ensure you do not miss any of your bills, which can negatively impact your score and take months to rebuild.

2. Lower Your Credit Utilization Ratio 

Your credit utilization ratio—the percentage of your available credit that you’re using—significantly impacts your credit score. To lower this ratio, focus on paying down balances or increasing your credit limits responsibly.

Pay off higher-interest debt first to save yourself money in interest over the long run. Alternatively, the snowball methodhelps you pay off smaller balances,building momentum and keeping youmotivated. Pay more than the minimum when possible, and try to use windfalls such as tax refunds or bonuses to make larger payments.

If you increase your credit limit, do so only if you can avoid the temptation to run up more debt. The higher limit cuts your utilization ratio and raises your score, but overspending can wipe out those gains quickly. Combine all the above strategies to lower your utilization ratio for a sustainable credit score improvement.

3. Dispute Any Inaccuracies on Your Credit Report

Regularly reviewing your credit report can help maintain and improve your credit score. If there are mistakes on your report, like wrong account balances, late payments, or accounts you have never seen, it may bring down your credit score. Checking your reports frequently enables you to find and dispute inaccuracies before they can have long-lasting effects on your creditworthiness.

Start by obtaining your credit reports for free on Experian or FICO. Look closely for errors, such as duplicate accounts, incorrect account statuses, or accounts opened because of identity theft. If you find an error, submit a dispute to the credit bureau reporting the error and include supporting documentation. The dispute process usually takes 30 days, and cleaning up errors may dramatically improve your score. 

Take extra precautions to safeguard your credit by adding credit monitoring services. These will alert you to suspicious activities so you can take quick action. Being proactive and catching mistakes quickly will prevent a minor error from significantly damaging your credit score.

Common Credit Report Errors to Look For

Here are a few errors to look out for when checking your credit report:

4. Avoid New Credit Applications

While keeping older credit card accounts open can be good for your credit score because it keeps your credit history longer and your credit utilization ratio lower, opening new credit should not be done on a whim. 

Each time you apply for credit, you trigger a hard inquiry into your credit report, which can temporarily drop your score. Hard inquiries usually lower your score by less than five points each; however, several inquiries in a short period, especially for credit cards, can have a compounding negative effect.

As the first and simplest step, avoid applying for credit if you don't need it. Before this, always see if prequalification is an option under the lender. This doesn't require a hard inquiry—merely a soft one that doesn't detriment your credit score. It will let you know your eligibility and possible terms of the deal.

5. Keep Old Accounts Open

Keeping your older credit accounts open, even those with which you don't spend very often, will maintain or increase your credit score. The length of your history comprises 15 percent of your FICO® Score. In determining this area of the credit score, things such as the age of your oldest account and the average age of all your accounts factor into it. Closing an older credit card, especially if it's one of your longest-standing tradelines, will shorten your credit history and negatively impact your score.

To maximize older accounts, consider keeping them active with occasional small purchases or setting up a recurring bill on the card. This prevents the account from being identified as inactive, at which point the issuer may close it. If the card has an annual fee and no longer serves your needs, contact your issuer to determine whether you can downgrade to a no-fee version while retaining the account's history.

6. Diversify Your Credit Mix

Your credit mix, or your different types of credit, accounts for 10% of your FICO® Score. A mix of revolving credit, such as credit cards, and installment credit, such as mortgages, car loans, or student loans, shows the lender that you can handle various types of credit responsibly. Diversity helps establish a well-rounded credit profile, which most lenders look for.

You can add a type of credit you don't currently have to your credit mix, but only if it makes sense for your financial goals. For example, adding a small personal loan or an auto loan (if you need to purchase a car) may benefit your mix if you only use credit cards. Alternatively, if you have little credit history, consider opening a credit-builder loan to show you can borrow responsibly.

How Long Does It Take to Improve Your Credit Score?

How long it will take to fix your credit score depends on what you do and how bad your credit situation is. While some strategies offer quick wins, others require long-term commitment and sustained effort. Understanding what impacts your score and how long changes take to reflect will help you set realistic expectations.

Minor Changes: Quick Wins

If you’re looking for quick improvements, minor adjustments can lead to noticeable changes in as little as a month or two. For example:

Paying Down Credit Card Balances: Reducing your credit utilization ratio can boost your score quickly, often within 30 days of your following credit card statement.

Disputing Credit Report Errors: You should expect score improvements right after the bureau processes your dispute, about 30 days later or so. The addition will add a positive payment history to your credit report since you will begin to bring accounts you once made late payments up to date in one or two billing cycles.

These actions can provide a short-term boost but will not address more profound issues, such as a history of delinquencies or high debt.

Significant Changes: Long-Term Commitment

If your credit problems are more severe, your score may not recover as quickly. This could take several months or even years. For example:

Recovering from Late Payments: Delinquencies remain on your credit report for a maximum of seven years, but their effect will decrease with time while you make a track record of timely payments. Improvement should be seen in 6-12 months after consistent good behavior.

Paying Off Collection Accounts: While paying off collections may not immediately remove the record from your report, it shows lenders you’re resolving past debts. Improvement may take several months.

Rebuilding After Bankruptcy: Bankruptcies stay on your credit report for 7-10 years, depending on the type. You can start rebuilding credit by adding positive activities like secured credit cards or credit-builder loans within 1-2 years.

3 Common Mistakes To Avoid When Trying To Boost Your Score

When trying to improve your credit score, it’s essential to avoid common pitfalls that can hinder your progress. Avoiding these mistakes can save you time, money, and frustration as you work toward better financial health.

Assuming All Debt Is Bad Debt

Not all debt, such as mortgages or student loans, is terrible. If managed well, it can help boost your score. Trying to avoid debt may limit you from building your credit history, which is vital for a good credit score. 

Not Using Credit at All

Without credit, lenders cannot gauge your financial reliability. Building and maintaining a good credit score requires responsible credit use, such as having a credit card and paying the balance monthly.

Waiting Too Long to Start Improving Your Credit

The sooner you start building your credit, the more rapidly you'll see it improve. Every day spent delaying action to dispute those errors or reduce credit utilization makes it all the more difficult to get on your feet.

FAQ

Here are some of the most commonly asked questions regarding credit scores. 

What Is the Fastest Way to Improve My Credit Score?

The fastest way to improve your credit score is to reduce your credit usage, pay down the outstanding balance on your credit cards, and dispute the errors on your report. These actions can immediately positively influence your credit score but depend on your credit history.

Does Paying Off Debt Immediately Improve My Credit Score?

Paying off debt can improve your credit score by reducing your credit utilization ratio and showing responsible financial behavior. However, the exact impact depends on the type of debt and your overall credit profile.

How to Get a 700 Credit Score in 30 Days?

It may not be realistic to achieve a 700 credit score within 30 days; however, you can take measures to improve it over time. You should focus on lowering your credit utilization, disputing errors on your credit report, and making all timely payments. Avoid applying for new credit during this period to minimize the negative impacts of hard inquiries.

How Often Should I Check My Credit Report?

You should check your credit report at least once a year through free services like Experian and FICO. If you're improving your credit, consider monitoring it more frequently to track changes and address issues promptly.