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How to Improve Your Credit Score

Ben Luthi
By
A woman wearing a suit smiles at her laptop computer screen while sitting down at her office desk.

Experian, TransUnion and Equifax now offer all U.S. consumers free weekly credit reports through AnnualCreditReport.com.

There are several ways you can improve your credit score, including making on-time payments, paying down balances, avoiding unnecessary debt and more. But depending on your unique situation, it can be difficult to know where to start.

Whether you're building credit from scratch or rebuilding after some credit missteps, understanding the factors that go into your credit score can help you determine which steps to take. With that in mind, here are seven ways to improve your credit score, how much impact they'll have and how long it can take to start seeing results.

1. Make On-Time Payments

Credit impact: Your debt payment history accounts for 35% of your FICO® Score☉ and is the most important credit score factor. Payment history includes on-time, late and missed payments, all of which are reported to one or more of the national consumer credit bureaus (Experian, TransUnion and Equifax). Always making payments on time can go the furthest to helping you improve credit.

Actions you can take: If you're having trouble making payments on time, set up autopay for at least the minimum due and create calendar reminders and alerts through your online account. You can also register for Experian Boost®ø and get credit for payments that aren't traditionally reported to the credit bureaus, including eligible rent, utilities, cellphone, insurance and some streaming subscriptions.

How long it takes: You may see a steady rise in your score as you pay your bills on time. If you make a payment over 30 days late, it will remain on your credit report for seven years and hurt your scores, but that negative impact will diminish over time as you get caught up and pay on time going forward.

Learn more >> How to Improve Your Payment History

2. Pay Down Revolving Account Balances

Credit impact: How much you owe accounts for 30% of your FICO® Score, and your credit utilization rate—the percentage of available credit you're using on revolving credit accounts such as credit cards—is a major element. While some experts recommend keeping your utilization rate below 30%, there's no hard-and-fast rule. Aim to keep it as low as possible.

Actions you can take: If you have one or more high credit card balances, make paying them off a priority. Consider different ways to pay down your credit card debt, including a:

If you regularly pay your credit card bill in full but still have a high utilization rate due to low credit limits, consider paying your bill shortly before your monthly statement date or making multiple payments to keep your balance low throughout the month.

How long it takes: Credit card issuers typically report balance and payment information to the credit bureaus once a month. So, as you pay down your credit card debt, you may start to see the results of your efforts within a few months.

Learn more >> How to Pay Off Credit Card Debt

3. Don't Close Your Oldest Account

Credit impact: Length of credit history makes up 15% of your FICO® Score and is heavily influenced by the age of your oldest account and the average age of all of your accounts. While loan accounts are typically closed once you pay off the debt, you can keep credit cards open indefinitely. Closing a credit card can hurt your credit score, especially if it's one of your oldest tradelines.

Actions you can take: Even if you no longer use your oldest credit card, consider using it every few months or putting a small recurring bill on the card to keep it active. If the card no longer serves your needs or charges an annual fee, check with your card issuer to see if you can upgrade or downgrade the card to one that's a better fit. This may allow you to keep the credit history but switch to a card that works better for you.

How long it takes: Your length of credit history is established over the course of several years. However, if you close an old account or open multiple new credit accounts in a short period, you may see negative results rather quickly.

Learn more >> How Does Length of Credit History Affect Your Credit?

4. Diversify the Types of Credit You Have

Credit impact: Credit mix accounts for 10% of your FICO® Score and involves managing different types of credit. For example, someone with two credit cards, an auto loan and a mortgage loan will have a stronger credit mix than someone with just one credit card.

Note that your credit mix generally won't be a major factor in determining your eligibility for a loan or credit card, but it can help take a good credit score to the next level.

Actions you can take: Your credit mix will likely improve naturally over time as you apply for different types of credit to meet your financial needs. If you're just starting to establish your credit history, it can help to apply for a starter credit card and a credit-builder loan.

Once you get going, however, try to avoid taking on more debt than is necessary just for the sake of building credit.

How long it takes: Because your credit mix has a smaller influence on your credit score, there's no need to rush. Diversifying your credit mix can take several years as you apply for new credit accounts when you need them.

Learn more >> What Is Credit Mix and How Can It Help Your Credit Score?

5. Limit New Credit Applications

Credit impact: Virtually every time you apply for credit, the lender will run a hard inquiry on one or more of your credit reports. These inquiries and how long it's been since you've opened a new account make up 10% of your FICO® Score.

Each hard inquiry will typically knock fewer than five points off your credit score, but multiple inquiries in a short period of time, especially when applying for credit credit cards, could have a compounding negative effect.

Actions you can take: Only apply for credit when you need it to avoid too many hard inquiries. Before you apply for a loan or credit card, check to see if the lender offers prequalification, which can give you an idea of your eligibility and potential terms with a soft credit check, which won't impact your credit score.

If you're shopping around for a mortgage loan, auto loan or student loan, newer FICO® Score versions will combine multiple inquiries into one for scoring purposes as long as you complete the rate-shopping process within a short timeframe, often between 14 and 45 days depending on the version used.

How long it takes: Hard inquiries remain on your credit reports for two years, but they only impact your FICO® Score for up to one year.

Learn more >> Hard Inquiry vs. Soft Inquiry: What's the Difference?

6. Dispute Inaccurate Information on Your Credit Report

Credit impact: Inaccurate credit report information can have a significant negative impact on your credit score, especially if it's a serious issue like a late payment or a high credit card balance. If you're a victim of identity theft, you may have multiple derogatory marks on your credit reports in the form of fraudulent accounts.

Actions you can take: If you have inaccurate or fraudulent information on your credit reports, you have the right to dispute it with the credit reporting agencies. Start by getting your free Experian credit report, and request your free weekly Equifax and TransUnion credit reports through AnnualCreditReport.com.

Review your reports for any information you don't recognize. If you find inaccurate details, follow the dispute process with Experian and the other credit bureaus to initiate an investigation.

How long it takes: Credit disputes are typically resolved within 30 days. If the credit bureau determines that your dispute is valid, it will correct or remove the negative information.

Learn more >> How to Dispute Credit Report Information

7. Become an Authorized User

Credit impact: If you're new to credit or rebuilding your credit score, having a loved one add you as an authorized user on their credit card can have an immediate positive impact on your credit score.

That said, the impact can vary depending on how the credit card is managed and the overall makeup of your credit profile.

Actions you can take: Ask a parent or other loved one to add you as an authorized user on their account. Before you do, however, make sure that the account has a positive payment history and a relatively low credit utilization rate.

How long it takes: Once you're added as an authorized user, the card issuer will typically report the full history of the account to the credit bureaus within a month or two.

Learn more >> Will Being an Authorized User Help My Credit?

Frequently Asked Questions

  • The timeline for rebuilding credit will vary depending on the extent of the damage your credit score has sustained and the steps you take to rebuild.

    Negative items can remain on your credit reports for seven to 10 years, and it will take longer to recover from more serious credit events, such as bankruptcy, debt settlement, foreclosure and loan default.

    However, by following the steps above to improve your credit, you may start seeing significant improvement within a few years.

  • If you're building credit from scratch, there are several steps you can take to establish a credit score. Options include asking a loved one to add you as an authorized user on their credit card, applying for a starter credit card on your own or opening a credit-builder account.

    With Experian Go™, you can get free guidance on the best path to establishing your credit history, along with insights and tools to develop good credit habits and a chance to track your progress.

Check Your Credit Score for Free

Knowing where you stand and watching your progress can be important. With Experian, you can check your FICO® Score for free.

Additional Topics on Improving Your Credit

How Good Is Your Credit Score?

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