Having a good credit score is important for getting loans, credit cards, and other financial services at favorable rates. While it takes time to build credit, there are steps you can take to increase your credit score relatively quickly. Here are some of the fastest ways to improve your credit score.
Pay down balances
One of the biggest factors in your credit score is your credit utilization ratio – the amount of available credit you’re using. Keeping balances low on credit cards and other revolving credit accounts will help lower your utilization and improve your credit score quickly.
Tips for lowering credit utilization
- Pay off entire balances each month if possible
- Pay down balances well before statement dates
- Focus on paying down cards with the highest balances first
- Ask for credit limit increases on accounts to lower utilization
Experts recommend keeping individual credit utilization below 30%, and overall utilization below 10%. Paying down balances on cards and loans can lower your ratios and cause a rapid jump in your credit score.
Become an authorized user
Asking a family member or friend with good credit to add you as an authorized user on their credit card is a quick way to get the benefits of their long credit history.
As an authorized user, the primary account holder’s payment history gets added to your credit reports. Their credit utilization also counts toward your overall ratio. As long as they use credit responsibly, you can see a meaningful score improvement by becoming an authorized user.
How to effectively use authorized user status
- Choose an account open for several years with on-time payments
- Make sure the card has a large enough limit to keep utilization low
- Agree with primary user to remove you later if needed
Using someone else’s credit history isn’t a perfect solution. But it can provide a valuable boost, especially if you’re trying to recover from past mistakes.
Dispute reporting errors
Errors on your credit reports could be unfairly dragging down your credit score. Disputing and correcting any inaccurate information can give your score an almost immediate lift.
Common credit report errors
- Outdated personal information
- Accounts that don’t belong to you
- Incorrect account statuses
- Settled debts still marked open
- Multiple listings of the same debt
Review your credit reports closely and dispute any errors you find with the credit bureaus. Providing documentation helps get errors corrected faster. Persevering pays off, as fixing reporting mistakes can boost your credit score fast.
Become current on delinquent accounts
Late payments, collections accounts and public records like bankruptcies can pound your credit score. Bringing these accounts current or paying them off entirely can set you on the road to recovery.
Strategies for minimizing past mistakes
- Bring accounts out of collections and have negatives removed
- Negotiate pay-for-delete agreements
- Consolidate debt into a new loan with regular payments
- Wait for time to pass and negatives to age
As time goes by, the impact of financial missteps will decrease. But taking proactive measures to resolve problems will help your score rebound much faster.
Limit credit applications
A flurry of recent credit applications can signal higher risk and depress your credit scores. Before applying for new credit, wait until recently opened accounts show up on your reports.
How applications impact credit scores
- Creates new hard inquiries on credit reports
- Lowers average age of accounts
- Potentially raises credit utilization
- Indicates greater need for credit
Every new account you open can ding your scores a few points initially. Avoid opening too many new accounts at once and space out applications to minimize damage to your credit.
Raise your credit limits
A credit limit increase can lower your utilization ratios and boost your credit score quickly. If issuers deny your request, there are still steps you can take.
How to increase credit limits
- Ask issuers for periodic automatic increases
- Request larger limits after making payments reliably
- Move balances from maxed cards to cards with room
- Open a new account with a higher limit and transfer balances
Lowering utilization with higher limits demonstrates responsible use of credit. Just avoid running up high balances on larger limits.
Mix up credit types
Diversity of accounts, known as your “credit mix,” accounts for 10% of FICO credit scores. Adding new types of credit can further optimize your credit profile.
Ways to diversify credit
- Open a secured card if struggling with bad credit
- Become an authorized user on loans and mortgages
- Finance larger purchases on long-term installment plans
- Open a credit builder account and make payments reliably
Having credit cards, retail accounts, installment loans, and mortgages can demonstrate you can handle different types of credit responsibly. Mix it up to maximize scores.
Wait for time to pass
Time is one of the most effective ways to boost your credit score. The farther negative marks are in your past, the less impact they have.
Letting time work for you
- Most public records drop off reports after 7-10 years
- Late payments hurt less with time
- Credit history lengthens raising score
- Credit mix diversifies over time
Avoid any new negatives, continue making payments reliably, keep credit utilization low, and your score will rise steadily over time. Patience and perseverance pay off.
Monitor credit regularly
Checking your credit reports and scores frequently enables you to quickly catch any new inaccuracies or suspicious activity that could cause your credit score to decline. Here’s how to stay on top of your credit.
Ways to monitor credit
- Obtain free reports annually from each major bureau
- Review reports closely and dispute errors promptly
- Sign up for free credit monitoring services
- Consider paid credit monitoring for enhanced features
- Check scores frequently from free sites and cards
Monitoring credit helps you know where you stand. Watch for changes, trends and errors so you can take corrective measures before lasting damage occurs.
Conclusion
Boosting your credit score quickly is possible with some diligence and smart financial moves. Lower credit card balances, add positive credit history, resolve past issues, and manage accounts prudently. Give it time and keep close watch – and you’ll see your credit scores climb steadily higher.