How To Improve Your Credit Score Fast With Simple Steps

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Banks don’t know you as well as your mommy or your daddy. Perhaps you’re a trustworthy person who has struggled with handling credit in the past — but you’ve turned a corner and are determined to manage it responsibly.

Here’s the thing, though: Lenders don’t usually take the time or ability to verify your good intentions. All they can do is look at your track record to decide if you’re a good fit for a loan. To gauge your creditworthiness, they look at your credit score.

Here’s a look at what makes up a credit score, and how to improve your credit score numbers.

Why Your Credit Score Matters

Your credit score is a barometer for how healthy your credit habits are. Whether you’ve had some missteps in the past or you’re a model credit holder, your credit score will reflect your past.

Lenders check your credit score when you formally apply for loans like a credit card, auto loan, mortgage, etc. Landlords will also often run your credit when you apply to rent an apartment. Some employers might run your credit when deciding whether to hire you.

That’s why your credit score matters. It can mean the difference between landing your dream house or job, and not. To boot, a high credit score typically translates into lower interest rates and higher-quality loans and credit cards.

If your credit score isn’t where you want it to be, don’t worry — there are still options available. You can explore the best credit cards for bad credit to help you rebuild your credit over time.

6 Steps To Improve Your Credit Score Over Time

While it might take some time, it’s completely doable to improve your credit score. You’ll need to be consistent. Start with these steps:

1. Pay All Bills on Time

Far and away the most important action you can take to maintain a good credit score is to avoid late payments. Payment history makes up 35% of your overall score.

You don’t have to pay your credit card bill in full each month, but you should at least make the minimum payment. If you don’t, the credit bureaus will see that you don’t reliably pay your loans and they’ll kick your credit score into the wine cellar.

To avoid submitting a late payment, try setting calendar reminders. Even better, enroll each of your loans to autopay for the minimum payment. That way you’ll never be delinquent, even if making a payment slips your mind.

If you do forget, immediately make a payment. Creditors tend not to report a payment as late if you act quickly to resolve it. After that, you’ll get a negative mark on your credit report. The longer you’re delinquent, the worse it is for your credit.

2. Lower Your Credit Card Balances

Your credit utilization ratio has a large influence on your credit score. This represents the amount of available credit that you’re using. Credit utilization makes up 30% of your overall score.

The lower your credit utilization, the better. Experts recommend that you keep your amounts owed under 30%, meaning if you have $20,000 in available credit, you should never be using more than $6,000 at a time. Try to keep your utilization under 10% for the best score.

You can keep your amounts owed low by:

• Paying down your balances early, before the issuer reports your activity to the credit bureaus.
• Paying on your card multiple times per month
• Requesting a credit limit increase on your credit card(s)
• Using credit cards for small purchases only until your score improves.

3. Don’t Apply for Too Much New Credit at Once

Two factors are affected when you open a new loan.

The first is your length of account history, which is about 15% of your credit score. Opening a new account decreases the average age of your accounts. The longer your average account age, the better it is for your credit score.

The second is new credit, which makes up about 10% of your credit score. Every time you apply for a loan, such as a credit card, the creditor performs a hard inquiry on your credit to see if you’re a good fit for its product. This inquiry will appear on your credit report, and it will temporarily lower your credit score a bit.

A lot of applications at once can make you lookdesperate for credit, which is risky to lenders. For this reason, you should only apply for new credit when you’ve got a good reason. Don’t just open credit cards left and right without thinking about how it fits into your goals.

4. Build a Longer Credit History

Similar to step three, focusing on lengthening your credit history is key to a healthy score. To extend your credit history, it takes more than simply avoiding opening new credit cards all the time. Keep your old accounts open, even if you don’t use them often.

For example, you likely haven’t been using the starter credit card you first opened when you were younger. Instead of canceling it, put it aside and allow it to be a pillar of your credit history. You can also ask to be added as an authorized user on someone else’s card to gain the benefits of their account age on your credit report.

There’s a caveat: If a credit card that you no longer use charges an annual fee, it’s not worth keeping just to benefit your credit score. Either cancel it or ask your issuer if you can downgrade it to a no-annual-fee version.

5. Use Different Types of Credit

Credit mix accounts for 10% of your overall credit score. This is achieved by maintaining multiple types of credit, such as an auto loan, credit card, mortgage, personal loan, etc. Having exclusively credit cards isn’t as beneficial as having one or two other loans, as well.

Of course, it’s not worth taking out a loan just to improve your credit mix. Only open accounts you truly need.

6. Check Your Credit Reports for Errors

This will take a little extra effort, but monitoring your credit report for inaccuracies is a large part of maintaining a good credit score. Mistakes on your credit report can lower your score, often through no fault of your own.

You can get a free credit report each year from AnnualCreditReport.com. Review it for:

• Incorrect late payments
• Accounts you don’t recognize
• Incorrect balances.

If you notice unfamiliar charges or spending you approve, that could be an indication of fraud. In general, if you do spot something amiss, dispute those errors with the credit bureaus to resolve them and protect your credit.

How Long Does It Take to Improve Your Credit Score?

The time it takes to improve your credit score is highly dependent on the current state of your credit profile.

If you’re new to credit and you don’t currently have a score, you can expect to develop a solid one within six months by keeping good credit habits. If your score is low because of loan defaults, it may take years to undo those mistakes. No matter your situation, it’s possible to improve your credit with determined effort.

Paying down credit card debt or disputing an error are small steps you can take to see your credit score improve in as little as one month. Over the long term, focus on building payment history, as this can typically take months or years to meaningfully reflect on your credit score.

Think of credit improvement like a marathon, not a sprint. The longer you build good habits, the better your score will get.

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