How to Improve Your Credit Score

The most effective ways to improve your credit score are to pay every bill on time, pay down your credit card balances, fix any errors on your credit reports, and avoid applying for new credit you don’t need. Payment history and amounts owed make up roughly two-thirds of a FICO score, so those two habits will move your score far more than any shortcut.

How fast you’ll see results depends on what’s dragging your score down. Below is a step-by-step plan, a worked example with real numbers, and a realistic idea of how long each fix takes.

Step 1: Get your credit reports and check them for errors

You can’t fix what you can’t see. Start by pulling your reports from all three nationwide credit bureaus at AnnualCreditReport.com, where the FTC says you can get free reports every week.

Go through each report line by line and look for:

• Accounts you don’t recognize, which could signal identity theft.
• Late payments you’re sure you made on time.
• Balances or credit limits that are wrong. A missing credit limit can make your utilization look higher than it is.
• Closed accounts shown as open, or the reverse.
• Duplicate accounts or old debts that should have aged off.

If you find a mistake, dispute it with the credit bureau that’s showing it and with the company that supplied the information. The CFPB explains how to dispute an error on your credit report, including what to send. Keep copies of everything.

Step 2: Never miss another payment

Payment history is the biggest single factor in FICO scores, at about 35%, according to myFICO. One late payment can stay on your report for years, so the best move is to make sure it never happens.

• Turn on autopay for at least the minimum on every card and loan. You can always pay more manually.
• Set due-date reminders a few days ahead so you can make sure the money is there.
• Line up due dates with your paycheck. Many lenders let you change your due date.
• If you’ve already missed a payment, catch up fast. A payment that’s 30 days late is less damaging than one that’s 60 or 90 days late.

If you’re struggling to pay, call the lender before you fall behind and ask about hardship options.

Step 3: Pay down your credit card balances

Credit utilization, the share of your card limits you’re using, is a big part of the amounts-owed factor. Unlike late payments, it’s based on your current reported balances, so bringing it down can improve your score relatively quickly. Our guide to credit utilization covers the details, including why the balance on your statement date matters.

A worked example

Say you have $3,200 on a card with a $4,000 limit and a 23% APR. Your utilization on that card is 80%, which is high.

Here’s how two payment plans compare, assuming no new charges:

Doubling the payment gets you to zero more than a year sooner and saves about $540 in interest. It also means your utilization falls twice as fast: after a few months at $300, you’ll be well below where you started, and once the balance is gone, that card shows 0% utilization.

Try your own numbers in the credit card payoff calculator. If you have several balances, our guide to debt snowball vs. debt avalanche helps you decide which one to tackle first, and how to pay off credit card debt faster covers ways to free up more money for payments.

Step 4: Be choosy about new credit

Each application for credit usually triggers a hard inquiry. myFICO notes that inquiries remain on your report for two years but only affect FICO scores for one year. A single inquiry typically has a small effect, but several in a short period can add up, especially if your credit history is short.

• Apply only for credit you actually plan to use.
• Avoid store card offers at checkout made just for a one-time discount.
• When shopping for a mortgage, auto or student loan, do your rate comparisons within a short window so the inquiries are treated as one.

Step 5: Keep old accounts open, when it makes sense

The age of your accounts and your total available credit both matter. Closing an old card with no annual fee can shrink your available credit and raise your utilization overnight. If you’re tempted to overspend, consider removing the card from your wallet and online accounts rather than closing it.

That said, a card with a high annual fee you don’t value may be worth closing. It’s a trade-off, not a rule.

Step 6: If you have little or no credit, build it deliberately

If your credit file is thin, the challenge isn’t bad information; it’s too little information. Common ways to build a record include:

• A secured credit card. You put down a deposit that usually becomes your credit limit. Use it for a small recurring bill and pay the statement in full.
• A credit-builder loan. Offered by some credit unions and community banks, these hold the loan amount in an account while you make payments, then release it to you at the end.
• Becoming an authorized user on a family member’s well-managed card.

Before you open any of these, confirm that the account reports to all three bureaus, since that’s what builds your file.

How long does it take? A realistic timeline

What to avoid

• “Credit repair” promises. No one can legally remove accurate, timely negative information. You can do anything a legitimate company can do, such as disputing errors, for free.
• Paying interest to “build” credit. Carrying a balance doesn’t help your score. Paying in full does the same work without the cost.
• Opening several accounts at once to raise your total limit. The inquiries and lower average account age can offset the benefit.
• Ignoring collection notices. Unresolved debts can lead to further collection activity and, in some cases, lawsuits.

Keep your score healthy for the long run

Once your score improves, keeping it there is mostly about routine: autopay on every account, card balances paid in full or kept low, a quick look at your reports a few times a year, and new credit only when you need it. A small emergency fund also protects your score, because it keeps a surprise expense from becoming a card balance or a missed payment.

The bottom line

To improve your credit score, start by checking your reports for errors, then build the two habits that matter most: paying on time and keeping your card balances low. In the example above, paying $300 a month instead of $150 clears a $3,200 balance in 13 months instead of 28 and saves about $540 in interest, while steadily lowering your utilization. If you want to understand exactly what each habit affects, our guide on how credit scores are calculated explains every factor, and what a good credit score is shows the ranges you’re aiming for.

This content is for educational purposes only and isn't financial advice. Calculator results are estimates based on the numbers you enter. For decisions about your situation, consider talking with a qualified professional. Read our full disclaimer.