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11 Ways to Improve Your Credit Score

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If you aren’t getting approved for credit cards or loans, or aren’t getting favorable rates for financing, you might need to make some improvements to your credit score. Doing that isn’t a particularly quick or simple process, but we have some tips that can help you along the way.

How Can I Improve My Credit Score?

As you begin the process of improving your credit score, keep in mind that it’s a marathon and not a sprint, but improving your score is worth the effort. A poor credit score can potentially cost you tens of thousands of dollars over the course of a lifetime. It can also become a source of serious stress, making you feel like you just can’t leave the mistakes of the past behind and move on. But, luckily, you’re not alone. Plenty of people struggle to improve their credit scores and there are a lot of things you can do to build good credit — and reap the rewards that come along with a good credit score.

1. Make Sure Your Credit Reports Are Accurate

Step one to improving your credit score is checking your credit reports. Each of us has three credit reports — one from each of the 3 major credit bureaus: Experian, Equifax and TransUnion. Credit reports can and very often do have mistakes on them. A 2012 study from the Federal Trade Commission found that 1-in-5 consumers had an error on at least one of their credit reports, and a follow-up study in 2015 (by the Federal Trade Commission) found that those who reported an unresolved error on one of their reports believe that at least one piece of disputed information is still inaccurate. Since your credit scores are based on the data in your credit reports, it’s incredibly important to make sure all of that information is accurate. If you have a mistake on your credit report, your credit score will reflect that mistake.

It’s easy to check your credit reports from each of the three major credit reporting agencies. You’re entitled to a free copy, once a year, of all three of your credit reports under the Fair Credit Reporting Act. These reports can be accessed via AnnualCreditReport.com, the government-mandated site run by the major bureaus. (You can also view a free credit report snapshot on Credit.com.)

Once you have your credit reports in hand, here’s a quick checklist of questions to ask yourself to help you spot potential errors:

  • Is all of your personal information accurate? (That can include your Social Security number, birth date, full name and address.)
  • Are all of your credit accounts being reported?
  • Are there any late or missed payments listed that you remember making on time?
  • Are there any accounts or applications for credit you don’t recognize?
  • Are there any items from decades ago still appearing on your report?

It helps to go through your credit reports with a highlighter and pick out any and all inconsistencies. Keep in mind that a credit report from one bureau may have an error, while another may not. That’s why it’s so important to check all three of your credit reports for inaccuracies. You may find none, a few, or perhaps many errors on your reports. That’s where the next step to improving your credit comes in.

Pro-tip: If you find an error on all three credit reports, you’ll have to dispute it separately with each credit bureau as they’re run separately from one another. You’ll also have to file a separate dispute for each error you find. (More on dealing with multiple errors on credit reports.) You can dispute these errors on your own for free or you could consider hiring a reputable credit repair company to help.  

2. Pinpoint What You Need to Improve

Simply having an error on your credit report doesn’t necessarily mean it’s causing your bad credit. For example, if a misspelled version of your name appears in the personal information section of your credit report, that likely isn’t causing your credit score to dip.

Other errors, like those listed in the previous section, could be to blame — and there are a number of possible reasons why those errors are there. Here are a few examples:

  • Your identity has been stolen and a thief is abusing your credit.
  • A collection account from years ago is still being reported, even though it’s past the statute of limitations in your state.
  • A bill your ex was supposed to pay (per your divorce) has gone unpaid for a while, and now you’re suffering the consequences.
  • You defaulted on one loan, and now it’s showing up as multiple defaults on your credit report because it’s been sold to debt collectors.
  • Your credit information has been mixed with someone else who has a similar name (and went through a foreclosure recently).

If your credit report is accurate, but you still have a bad credit score, it’s important to understand why. Here are the major credit scoring factors and how each one can impact your credit score:

  • Payment History: If you have a history of making late payments, creditors see you as a bigger risk, and this is the greatest factor in what could be causing your bad credit score.
  • Amount of Debt: Debt contributes 30% to a FICO Score’s calculation and can be easier to clean up than payment history, according to FICO’s website. (It weighs heavily on other credit scoring models, too.)  That’s because if you currently have five maxed out credit cards, creditors worry whether you’ll be able to take on more credit and whether they’ll get paid back first or if your other creditors will.
  • Age of Accounts: If you’re newer to credit and borrowing, there isn’t a whole lot of data to go on. You may need time to see your credit score improve.
  • Account Mix: Lenders want to make sure you can handle different types of credit like credit cards and auto loans, for example. If you only have credit cards, this may be keeping your score from rising.
  • History of Credit Applications: If you applied for a dozen new credit cards this month, creditors wonder why. They may be worried you’re overextended financially.

3. Create a Plan to Improve Your Credit Score

If your credit report information is accurate, but you know what you did wrong and want to work to improve it, you can make an action plan using your free Credit.com account, and see how that plan impacts your credit scores over time. You can even get tips on what your problem areas may be.

4. Fix Your Late Payments

You may feel inclined to close accounts with a lot of missed payments, hoping those missed payments will just disappear, but sadly, they won’t. Your best bet here is to get yourself back on the right track — set up payment due date alerts with all your credit cards and loans and get organized. You can move credit card payment due dates around pretty easily on your bank or lender’s website — make sure they fit your paycheck schedule.

Ask your credit card issuer or lender if they can forgive that late payment. Maybe you were out of the country on vacation or the check got lost in the mail and you had no idea the bill existed. Credit card companies in particular are pretty forgiving if you have a long track record of making on-time payments.

5. Build a Strong Credit Age

If you have a short credit history, there’s not a whole lot you can do quickly here to improve your credit. You could try to piggyback onto a friend or family member’s credit card with a long history of on-time payments by having them add you as an authorized user, but you may struggle to find someone willing to do so since they would be responsible for any charges you make. Your other option: Wait it out and don’t close any accounts.

6. Clear Up Any Collection Accounts

Contact the debt collector listed on your credit report to see if they’d be willing to stop reporting the debt to the credit bureaus in exchange for full payment. This technically violates some of the collectors’ agreements with the credit bureaus, so it may be a non-starter, but it never hurts to try. Just be sure to get that promise in writing before you make a payment. Also, if it’s a debt that you don’t recognize or seems inaccurate, dispute it with all three credit bureaus. You may get it removed and see your credit score improve quickly.

7. Don’t Let Old Mistakes Unfairly Haunt You

If you’ve filed for bankruptcy, gone into foreclosure or suffered through a short sale, you may be wondering when the credit score misery ends. How long will it really take to get out of the credit score hole you’re in? For all of these mistakes, your credit score takes the biggest hit when it first hits your credit report, but its impact will lessen over time and eventually that account will disappear from your credit report due to federal laws that limit the amount of time it can impact you. (For more on the time limits those federal laws impose, go here.) If you see an item that shouldn’t be on your report anymore, dispute it with all three of the credit bureaus and you’ll likely see your credit score move up when the item is removed.

8. Get a Credit Card

If you’ve never had a credit card before, your scores may be suffering because of that account mix factor we talked about earlier. If you have a fair, good or excellent credit score, there are many credit card options out there for you. If you have a poor or bad credit score, read the next tip. Just make sure you make on-time payments — a new credit card account with a bad payment history will hurt you, not help you improve your credit scores.

9. Open a Secured Credit Card

A secured credit card is a type of credit card where you make a deposit into a checking account that “secures” the line of credit the bank or lender is extending you. For example, you can open a checking account and put $200 in it and get a line of credit for $200 (though some secured options will give you a higher credit limit than your deposit). You can get one with bad credit and adding a new account with a positive payment history will go a long way in showing creditors you’re back on solid ground.

10. Stop Applying for Stuff!

That 10% discount for signing up for a store credit card may seem worth it in the moment, but if your credit score will take a small hit for applying (whether you get approved or not). A hard inquiry will impact your credit score for a full year, though your score will start improving almost immediately after you apply and the impact will disappear at that 12-month mark. The hit is small (normally around 3 to 5 points) but if you’re on the bubble between credit score tiers or applying for lots of credit offers in a short time span, you can do a lot of damage.

11. Fix Your Credit Utilization Ratio

If your credit card balances every month are more than 30% of your limits, your score is suffering, even if you’re paying off your balances in full every month by the payment due date. That’s because your statement balance is most likely what’s being reported to the credit bureaus. So, keep an eye on those balances and consider pre-paying some of the balance if you know you’ll be above that 30% mark this month.

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If you’re consistently going over that 30% mark, ask your credit card issuer for a credit limit increase. If you’ve done some work on your credit score since you first applied and have a good payment history, they may consider upping your limit and giving you more wiggle room. You can also open a totally new credit card to divert some spending to.. Again, remember, the credit inquiry — and be sure your card can handle it. In most cases, the small hit should be more than mitigated by the new available credit, but if you’ve been applying for a lot of credit lately or you risk being rejected for the new credit line, you’ll want to tread carefully.

This article has been updated. It was first published October 25, 2016.


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