8 ways to improve your credit score

A good credit score can open countless doors, including improving approval odds, making it easier to increase credit limits, and getting better interest rates. Overall, improving your credit score is relatively easy—you just have to find a way to work toward your goal while considering your financial situation.

Several factors affect your credit score, so it’s important to take a multi-faceted approach when working to raise it. To improve your credit rating you should know when to pay your credit card, keep your credit utilization low, diversify your credit, leave old accounts open, and add new lines (and types) of credit when you’re ready.

The graphic below shows the factors that the three major credit bureaus consider and the ratios they use when calculating your credit score.

Read on to learn about manageable strategies you can use to help raise your credit score based on these factors.

1. Pay your bills on time

Paying your bills on time is one of the best ways to increase your credit score since payment history accounts for a whopping 35% – 40% of your credit score, depending on the scoring model used. Aside from the numbers boost, this also helps show lenders that you handle your finances responsibly and are more likely to repay the money you borrow on time.

If you do miss a payment, try your best to take care of it in 29 days or less since lenders usually report a delinquency to the credit bureaus after 30 or more days.

• Impact: High
• Time needed: Depending on how many bills you have, it shouldn’t take more than a couple of hours to set up auto-pay or an hour or two each month to pay bills.
• How fast it makes a difference: A late payment can stay on your credit reports for up to seven years.
• Tip: Set up auto-pay to ensure your bills are paid on time every month, or create bill due date alerts to help remind yourself.

2. Diversify your credit mix

Diversifying your credit mix can help raise your credit score by showing off how well you can manage several different types of credit at once. This means that, ideally, you’ll have some combination of different credit types. Some examples of types of credit you can take out include revolving credit like credit cards, installment credit like auto loans, open credit like charge cards, or a home equity loan.

• Impact: High
• Time needed: It can take a few days to a couple of months to apply for and get approved for different types of credit.
• How fast it makes a difference: Most loans and lines of credit will appear on your credit report after about 30 days; you may start to notice improvements early on but it could take up to a year to see a positive impact on your credit score after diversifying your credit mix.
• Tip: Take a breather between opening new accounts to avoid overextending yourself and hurting your credit score by having multiple hard inquiries on your report.

3. Check your credit report and dispute errors

Checking your credit report at least once a year can help you detect suspicious activity early and keep your finances healthy to improve your credit score. Claim your free annual credit report every year to check for errors like late payments and unfamiliar accounts. Then, dispute any credit report inaccuracies, like fraudulent hard inquiries, to ensure they reflect your financial history and behavior.

• Impact: High
• Time needed: It can take up to 45 days for the credit bureaus to investigate disputes after you submit the claim.
• How fast it makes a difference: You’ll usually notice a change in a few months.
• Tip: Use LifeLock Ultimate Plus to monitor and track changes to your credit report to help catch unauthorized changes to your credit file.

4. Keep your credit utilization low

Keep your credit utilization under 30% to help maintain a good credit score—between 1% and 10% is best. Credit utilization is the ratio of how much you can borrow vs. how much you have borrowed. So, if you have a combined limit of $26,000 for all of your credit cards, you should avoid using more than about $7,800.

If you’re ever in a pinch and need more money, look into other ways to get money or come up with a plan to quickly lower your credit utilization.

• Impact: High
• Time needed: Most people can recover from high credit utilization within a few months, but this depends on how much of their earnings they can put toward paying down their debt.
• How fast it makes a difference: The average time is three months.
• Tip: Lower your credit utilization by keeping debt low or increasing your credit limits.

5. Avoid closing old accounts

Keeping old accounts open can help you maintain a mature credit age, which is good for your credit history score. This can also help you keep your credit utilization low since you’ll have a higher credit limit. As a rule, only close out old accounts while actively working to fix your credit if the account carries unmanageable fees, you’re prone to overspending, or there’s a risk of identity theft.

• Impact: Moderate
• Time needed: None. Just keep your accounts open—especially older ones—while you’re trying to improve your credit score. Closing an old account will cause your credit score to drop and it could take a few months to rebound.
• Tip: Pay off delinquent accounts, but avoid closing them altogether if possible.

6. Become an authorized user

Becoming an authorized user is a great way to raise your credit score because you can benefit from someone else making timely payments. But again, payment history greatly impacts your credit score, so make sure you’re only piggybacking off someone who reliably pays their bills. If they make payments more than 30 days late, it will take a toll on your credit score.

• Impact: Moderate
• Time needed: It can take a few minutes to an hour for someone to add you to their credit card as an authorized user.
• How fast it makes a difference: It can take from 30 days to six months to see an impact, depending on whether you already have a credit score or not.
• Tip: Only become an authorized user on someone’s credit card if they’re good at paying off their debts. Otherwise, their financial mismanagement could hurt your credit score.

7. Keep hard inquiries to a minimum

Avoiding hard inquiries can help raise your credit score by preventing unnecessary hits to your credit report, which occur when you apply for new credit accounts. Lenders typically initiate these inquiries when you apply for credit cards, loans, or mortgages. Hard inquiries lower your score, and it can take two years for them to completely fall off your credit report.

On the other hand, soft inquiries from checking your own credit won’t hurt your credit score and are recommended.

• Impact: Moderate
• Time needed: None. Just avoid applying for anything that requires a hard credit check.
• How fast it makes a difference: A hard inquiry stays on your credit report for two years but only affects your credit score for up to one year.
• Tip: Dispute any hard inquiries you don’t recognize or that occurred without your permission.

8. Get credit for your bills

Reporting valid recurring bills like utilities and rent is a smart way to raise your credit score. By getting credit for the bills you have to pay anyway, you can easily show that you’re managing your monthly financial obligations well. Aside from that, reporting your bills also provides additional data for credit scoring models to assess so you can see faster credit score improvements.

• Impact: Moderate
• Time needed: Give yourself five minutes to sign up for Experian Boost.
• How fast it makes a difference: Experian Boost says you can instantly raise your credit score with their tool.
• Tip: Use a tool like Experian Boost to get credit for recurring bills that qualify like your rent, utilities, phone payments, and insurance.

Get help monitoring your credit score

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FAQs about improving your credit score

Still wondering how to increase your credit score? Here’s what you need to know.

What is a good credit score?

A good credit score can range from 670 – 780, depending on which bureau you check with. The highest score you can achieve is 850.  Here are the numbers showing the baseline of a typical good credit score according to each of the top three credit bureaus:

• Equifax: 670+
• Experian: 700+
• TransUnion: 721+

Will paying off collections help raise my credit score?

Paying off collections can help raise your credit score in the future by improving your payment history and reducing the negative impact of overdue accounts. Still, collections will typically stick to your credit report for up to seven years, so you probably won’t see a change very quickly.

How long does it take to improve your credit score?

Depending on where you’re starting from, it can take a few minutes to several years to achieve your target credit score. You may notice modest improvements in as little as five minutes if you use a credit-building app like Experian Boost. But if you have late payments on your report, you may wait years.

Will paying off all of my debt make my credit score drop?

Paying off all of your debt may temporarily hurt your credit if it impacts your credit mix or the length of your credit history—for example, if you pay off and close old accounts, that could negatively impact credit utilization and age of accounts. However, the algorithm would calculate improvements in payment history, which has the highest weighting of all factors.

What is a good strategy to improve your credit score?

A good credit improvement strategy is to tackle to-dos that will have the largest impact on your credit score, such as removing inaccurate entries on your credit report, making payments on time, and keeping your credit utilization low.

What scoring models do the credit bureaus use?

There are multiple credit-scoring models used by the credit bureaus but the most common are FICO® and VantageScore®.

What are the steps to disputing credit report errors?

Dispute credit report errors by obtaining a copy of your credit report, identifying inaccuracies, gathering supporting documentation, and submitting a dispute online or through the mail.

How can I build my credit with no credit history?

You can build your credit from scratch by obtaining a secured credit card, applying for a credit builder loan, becoming an authorized user on someone else’s credit card, or using a credit-building app to include household bills. These strategies empower people with little to no credit history to demonstrate their financial responsibility.