How to increase your credit score, no matter when or where you start

Increasing your credit score is a marathon, not a sprint. TORWAISTUDIO / Getty Images
  • To increase your credit score, the first thing you’ll want to do is check your credit report and score and flag any inaccuracies that could be negatively influencing your credit.
  • Then, it’s about good habits: creating a system to pay your bills on time, getting a handle on your debt, postponing opening any new credit lines, and resisting taking on debt.
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On the list of things you can do to improve your financial status, increasing your overall credit score is definitely near the top.

People with good credit scores have access to better interest rates on loans and credit cards, which can affect everything from where you live and what kind of house you can buy to the car you drive and, potentially, even your employment, since it’s not unheard of for employers to check credit reports before making a hire.

Note that it’s extremely difficult to increase your credit score overnight, just because of how credit works. If you really want to make it a difference, you’ll need to be patient as you make changes and see them reflected in your score weeks, or even months, later. Increasing your credit score is a marathon, not a sprint.

If you’re wondering how to increase your score to reach that good, very-good, or even excellent credit-score range, here’s how to do it.

How to increase your credit score

1. Find out your score

It will be hard to track your credit-score progress without knowing where you began. Banks often offer free credit-score tracking for customers, or you can check it for free at any time on sites like Credit Karma, Credit Sesame, and There is no need to ever pay for your credit score.

The credit-scoring company FICO issues five categories of credit scores:

  • poor: 300-579
  • fair: 580-669
  • good: 670-739
  • very good: 740-799
  • excellent: 800-850.

Note that for most things, you don’t need perfect credit. Once you get solidly into “very good” territory, you should be able to get favourable terms from lenders.

2. If it’s lower than expected, and it’s not clear why, get your credit report

Your credit score is three-digit shorthand for the information contained in your credit report, which monitors all of your credit-related activity. According to the Federal Trade Commission, you’re entitled to one free copy of your credit report every 12 months from each of the three nationwide credit-reporting companies: Experian, Equifax, and TransUnion.

Note that there are plenty of opportunities to pay for your credit report, but is the best place to get your report for free (or call 1-877-322-8228). Be prepared to provide your name, address, Social Security number, and date of birth to verify your identity.

Just like how you shouldn’t pay for your credit score, you shouldn’t ever need to pay for your credit report.

Once you have your credit report, sit down and go through it, line by line. It’s not uncommon for there to be errors, or fraudulent activity, that are negatively affecting your score. If you do find an inaccuracy, you can correct it by “disputing” your credit report with the bureau. Credit Karma has a good guide on how to do it for free. While there are services that will dispute it on your behalf for a fee, you shouldn’t need to pay for help.

3. Get a handle on your debt

Credit bureaus generally won’t explain exactly how your credit score is calculated, but we do know that there are five inputs with these general weights:

  • 35% payment history
  • 30% current debt balances
  • 15% length of credit history
  • 10% new credit
  • 10% credit mix.

As Eric Rosenberg pointed out for Business Insider, these percentages mean that the first two factors alone have more of an influence than the other three factors combined.

“While you should certainly not ignore your average age of credit, pursuit of new credit, and credit mix, those factors don’t deserve much attention,” he wrote. “Unless you are planning to apply for a new mortgage or auto loan in the next six to 12 months, there are two clear places to put most of your efforts: payment history, and debt balances.”

Your debt balances are so important because they affect your credit utilization rate – the amount of credit you’re using divided by the total amount of credit you have available. Generally, you want to be using as little of your available credit as possible, not maxing out every credit line. The lower, the better.

If you have high credit-card debt increasing your utilization rate, it will be hard to raise your overall score. Make a plan to figure out exactly how much debt you have, then use the best tools at your disposal to help pay off credit-card debt, raise your credit score, and save thousands of dollars in the process.

4. Keep your credit-card balances low

Once you’re working on paying off existing debt, fight the urge to accrue new debt in its place. According to Experian, lenders usually like to see credit-utilization rates of 30% or less because it shows that you can manage your credit well.

5. Create a system to pay bills on time

The two steps above should start influencing your credit-utilization rate – now, on to the next most influential bullet: payment history.

There’s not much you can do about the past (beyond resolving any payment issues flagged on your credit report in step two), but you have complete control over your payments going forward. Lenders like to see a steady and reliable past payment history, since it’s a generally good indicator that you’ll continue to pay your bills on time in the future.

Don’t rely on yourself to remember your payments. Set up calendar reminders or automatic payments to your bills so you never miss one. If you set up automatic payments, just make sure you’re checking the bills when they come in (and the statements, if you’re paying credit cards) to verify you’re being charged as agreed and paying what you should be.

6. Become an authorised user on someone else’s account

If you know someone who is very responsible with their credit, becoming an authorised user on their accounts can have a positive effect on your credit score as well. Just be aware that the opposite is true, as well – as an authorised user with someone who is irresponsible with credit, you’ll be negatively affected.

7. Open new cards sparingly

If you’re really trying to work on your credit score, be cautious about opening new cards.

Credit cards don’t hurt your credit by default, but they do provide opportunities for missteps if you have trouble keeping track of them. When you open a credit card, the issuer makes a “hard inquiry” into your credit, which temporarily knocks your score down a few points. It will recover within a few months, but if you’re making a concentrated effort to improve your credit, you might not want to weather that blip.

Plus, another credit card means more temptation to spend and more payments to remember. You might want to wait to open a new card until your credit is where you want it.

8. Be cautious about anything that might create a hard inquiry on your credit report

Hard inquiries occur when a lender or creditor – like for a mortgage or credit card, like we talked about above – looks at your credit report as part of a decision to lend you money.

This type of inquiry can negatively influence your credit score, especially when there are too many of them. Again, your score will recover, but you might not want to take another knock when your credit is already low. If you’re planning to do anything involving credit, such as a personal loan, a mortgage, or an auto loan, you might want to hold off for a bit.

9. Consider leaving unused credit-card accounts open

Unless having too many cards presents a challenge for you in terms of overspending, there really isn’t any harm in keeping unused credit-card accounts open and, in fact, it could be to your advantage.

Because closing a credit card means you no longer have however much credit that account was offering, the closure may lead to an increase in credit-utilization ratio – and remember, lenders like to see that number at 30% or lower.

10. Keep tabs on both your credit score and your credit report

Identity-theft issues can wreak havoc on your credit score, so keeping close watch on your credit score and credit reports allows you to report any fraudulent activity as soon as you notice it.

Remember to order a free credit report from each of the three major credit bureaus once a year. A good rule of thumb is to set a reminder in your calendar every four months throughout the year to check in with a different one. Plus, because websites such as Credit Karma, Credit Sesame, and don’t make hard inquiries when they share your score with you, you might want to get in the habit of checking your score monthly.

This will give you a pretty accurate view of your financial accounts so you can catch any problems as soon as possible.

And finally, remember to be patient. Your credit won’t improve overnight – but it will get there.