Improve Your Credit Score in 7 Simple Steps

A high credit score can save you money, and maybe even help you land a job.

Written by Erin Gobler / December 9, 2021

Quick Bites

  • Your credit score can determine how much you pay on a car loan, mortgage and more.
  • The higher your score is, the better.
  • Scores change all the time, based on factors like whether you pay your bills on time.
  • As important as your credit score is, it doesn’t have to take a lot of time or effort to improve it.
  • You can bring your score up with some simple habits, such as checking your credit report for errors.

Your credit score is one of the most important numbers when it comes to your finances. It’s a three-digit number from 300 to 850 that creditors, lenders and other businesses use to gauge how responsible you are with money. The better you are at repaying debt, the higher your credit score.

Credit scores generally fall into these categories:

  • Under 620: Poor

  • 620–669: Fair

  • 670–720: Good

  • Above 720: Excellent

This number can affect many parts of your finances. When you apply for a loan or credit card, creditors use your credit score to decide whether to approve you. A good credit score helps you land lower interest rates, saving you money. In some states, your credit score can even be a factor in renting an apartment, job background checks, renting a car, qualifying for insurance and more.

Now that you know why your credit score is so important, you’re probably wondering what steps you can take to increase it.

We’ve put together this step-by-step guide to help you do just that. With a little effort, you can take some of the most impactful steps to boost your credit score. Actually seeing that number go up could take some time, because you’ll have to wait for credit bureaus to update your reports—but you can take the first steps in a few minutes today, then bookmark this page to come back and do the rest.

Inside this article

  1. Get your report
  2. Past-due accounts
  3. Automatic payments
  4. Get credit savvy
  5. Authorized users
  6. Credit for bill-pay
  7. Credit monitoring

Step 1: Review your credit report

One of the most important steps you can take to improve your credit score is to review your credit report. Your credit score is a number that rates your credit history, and your credit report is the full summary of your credit accounts and activity.

Reviewing your credit report will give you an idea of where your credit stands and what might be keeping your credit score down. Having this information lets you make a plan to improve your credit.

Federal law mandates each consumer can get a free credit report from each of the three credit bureaus each year. Since the start of the pandemic in 2020, all three credit bureaus have offered free weekly credit reports.

Here’s how to get a free copy of your credit report:

Visit AnnualCreditReport.com.

Click “Request your free credit reports.”

Fill out a short form.

Indicate which credit reports you want.

Request and review your reports online.

An important reason to review your credit report is to spot errors that are harming your credit score. Common errors include debts you’ve paid that are showing as unpaid, incorrect personal information and even accounts that don’t belong to you. These errors can have a major impact on your credit score, especially if a debt is erroneously listed as unpaid on your credit report.

Tip: A recent survey from Consumer Reports found that about 12% of consumers uncovered an error the last time they checked their credit report.[1]

If you find an error, you can fix it by disputing it with the credit bureaus. Today, credit bureaus—TransUnion, Equifax and Experian—make it easier than ever to dispute an error by providing a form on their websites. Once you dispute the error, the credit bureaus will investigate it, and unless the reporting company can verify the information is correct, the error will be removed from your credit report.

Step 2: Address past-due accounts

Your payment history is the single most important factor that determines your credit score. Of the five factors that affect your score, your payment history accounts for 35%.

Because your payment history is such an important factor, having a past-due account on your report can have a huge impact. Data from credit scoring giant FICO shows your score can drop by more than 50 points for a payment missed by 30 days and more than 100 points for a payment missed by 90 days.[2]

One of the quickest ways to boost your score is to address those past-due payments and get caught up as quickly as possible.

It’s important to note that, even when you catch up on your past-due accounts, they’ll still remain on your credit report.

According to the credit bureau Equifax, most negative information—including late payments and delinquent accounts—remains on your credit report for seven years from the date it’s reported.[3] But you’ll still see a credit score boost from getting caught up on your payments.

Step 3: Set up automatic payments

As we mentioned, your payment history is the most important factor in determining your credit score. Addressing past-due payments on your credit report can go a long way in boosting your score. But what’s even more important is being proactive to ensure you don’t miss payments moving forward.

One of the simplest ways to avoid late payments is to set up automatic payments on your monthly bills. You can set up automatic payments on bills such as your:

  • Rent or mortgage

  • Utilities

  • Credit cards

  • Student loans

  • Auto loans

Avoiding late payments isn’t the only benefit of setting up automatic payments. It can also help you streamline your finances and spend less time paying bills each month. As a result, that time is freed up for other things. Plus, some lenders offer discounts to borrowers who set up automatic payments on loans.

Step 4: Get credit card savvy debt

These days, it’s not unusual to carry a credit card balance. Recent data from the credit bureau Experian shows that the average credit card balance is $5,313.[4]

But carrying a credit card balance can hurt your credit score because of its impact on your credit utilization, which is the percentage of your available credit you’re using; it accounts for 30% of your credit score. A general rule of thumb is to use less than 30% of your available credit to avoid hurting your credit score.

One of the quickest ways to reduce your credit utilization—and therefore, increase your credit score—is to pay off credit card balances. You’ll be using a smaller percentage of your credit, which sends a positive signal to creditors that you can responsibly pay off debt.

Another way to reduce the percentage of available credit you’re using is to increase the credit available to you.

When you sign up for a credit card, the card issuer sets your credit limit based on your credit score and history. After you’ve had a card for a while and have consistently made on-time payments, you can request an increase to your credit limit.

Tip: You don’t have to choose between paying off credit card debt or increasing your credit limits. Instead, do both at once to see the biggest decrease in your credit utilization and the biggest boost in your score.

Step 5: Become an authorized user

Another proven way to boost your credit score is to become an authorized user on someone else’s credit card. This move can benefit your credit score in a few ways:

  • Payment history: When you’re added as an authorized user on someone else’s credit card, you’ll get credit for all of their past on-time payments. This perk is especially important for those with thin credit reports without many on-time payments to report.

  • Credit utilization: Becoming an authorized user on someone else’s credit card can decrease your credit utilization, because it increases the amount of credit available to you.

  • Age of credit: Credit bureaus like to see a long credit history, and the age of your credit accounts makes up 15% of your credit score. Becoming an authorized user, especially on an older credit card, can increase your age of credit if you otherwise have a relatively short credit history.

But there are a few caveats to consider.

First, this strategy will work only if the person who adds you to their credit report has a relatively high credit limit and a history of on-time payments. It’s also important to ensure that the credit card has been open for a long time, because how long an account has been open factors into your credit score.

Tip: Becoming an authorized user on a relatively new credit card or one with missed payments will do more harm to your credit than good, because it just adds bad history to your credit report.

Also be cautious of how you use this new credit account. When you become an authorized user on the credit card of a friend or family member, you may gain access to a credit card for your own use. Remember that if you use the card irresponsibly, you won’t just be damaging your own credit. You’ll be damaging the credit of your loved one, too.

Step 6: Get credit for paying your bills

In most cases, the only payments that contribute to your credit report and credit score are debt payments, such as loans and credit cards. The exception is when you have a late payment for one of your monthly bills, which may be reported to the credit bureaus.

Unfortunately, this system can be disadvantageous if you pay your monthly bills on time but don’t have any loans or credit cards. It leaves you without positive marks on your credit report, even though you’re being responsible with your money.

Luckily, one credit bureau came up with a solution to this problem. Experian Boost is a free service that adds monthly bills like your utilities, cell phone, streaming services and more to your credit report. Once you connect your bank account and choose which bills to track, you’ll instantly start getting credit for those on-time payments on your Experian credit report, which can increase your credit score.

Step 7: Set up credit monitoring

Improving your credit score isn’t a task you can do once and enjoy the benefits forever. It’s an ongoing process that requires using credit and debt responsibly.

An important ongoing step of improving your credit is setting up credit monitoring.

With the right credit monitoring service, you’ll be able to check your credit score at any time and get notifications when it changes. You’ll also be notified of any changes to your credit report, so you can immediately spot errors or fraud.

In many cases, credit monitoring is free.

Here are some of the top free credit monitoring services available:

There are also plenty of paid services you can check out, which include:

Article Sources
  1. Consumer Reports. “American Experiences Survey: January 2021 Results.” https://article.images.consumerreports.org/prod/content/dam/surveys/Consumer%20Reports_AES_CREDIT_REPORT_ERRORS_VIDEO_DOORBELLS_PRODUCT_SAFETY_RECALLS_19-January%202021.
  2. myFICO. “Changing the Score.” https://www.myfico.com/static/doc/education/FICO_Consumer_Credit_Activity_Infographic.pdf.
  3. Equifax. “How Long Does Information Stay on My Equifax Credit Report?” https://www.equifax.com/personal/education/credit/report/how-long-does-information-stay-on-credit-report.
  4. Experian. “Experian 2020 Consumer Credit Review.” https://www.experian.com/blogs/ask-experian/consumer-credit-review.

About the Author

Erin Gobler

Erin Gobler

Erin is a personal finance expert and journalist who has been writing online for nearly a decade. Erin’s work has appeared in major financial publications, including Fox Business, Time, Credit Karma, and more.

Full bio

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