August 26, 2024

How to Improve Your Credit Score — Fast

When you make a credit request — whether it’s applying for a loan, renting an apartment, or asking for a limit increase on your card — your success depends on your credit score.

Lenders use this number to see how reliable you’ve been with credit in the past and decide whether they lend to you. The higher your score, the better the chance that a lender approves your application — or that they give you better terms.

But credit scores are complicated and based on years of use, which means increasing your score requires patience. If you need to know how to improve your credit score fast, here are 10 things you can do.

What is a good credit score?

A credit score provides a snapshot of your history with borrowing money, like how often you make payments on loans and how long you've been doing so. A "good" credit score is generally 661-780 or higher, but this varies slightly between credit reporting agencies. The most common credit bureaus are FICO and VantageScore. These are the ranges:

Rating	FICO	VantageScore
Exceptional/Excellent	800–850	781–850
Very Good/Good	740–799	661–780
Good/Fair	670–739	601–660
Fair/Poor	580–669	500–600
Poor/Very Poor	300–579	300–579

Why is a good credit score important?

A good credit score helps lenders decide if you’re a trustworthy borrower. That trust affects your eligibility to get a credit card or approved for a loan. And, once you’re approved, it impacts the maximum credit limits, interest rates, and repayment terms they offer you.

What impacts your credit score?

Five main categories impact credit scores:

Payment history
Credit utilization
Length of credit history
New credit inquiries
Credit mix

10 ways to improve your credit score

Let’s look at some of the fastest ways you can improve your credit.

1. Make on-time payments

Up to 35% of a person's credit calculation comes from proof that they consistently make debt payments on time. That includes mortgages, auto loans, student loans, credit card bills, and more. Missing a single payment harms your reliability, so always making at least the minimum payment is a great way to get a good credit score. Most bill payments — like utilities or phone plans — don’t impact your credit score.

2. Reduce credit utilization

The second most significant factor in a person's credit score at 30% is their credit utilization. Credit utilization refers to how much of their available credit a person uses. For a better credit score, keep your credit utilization under 30%. Using more than that suggests you’re too reliant on credit and at risk of not making payments.

One way to reduce credit utilization is to increase your credit card limit. If you have a low limit, try to only spend on your card when it’s absolutely necessary. You might not be able to get an increase until you prove you’ll make reliable payments.

For example, if a person has a credit card with a limit of $1,000 and spends $700 on the card every month, their utilization is at 70%, and they’ll have a harder time increasing their score. But a person with a $10,000 limit using $2,500 only has a 25% utilization, proving they aren’t as reliant on credit (despite the higher spending).

3. Don't close old accounts

It can be tempting to close old credit cards that aren't in use after upgrading to a better one or trying to stop using credit entirely — but 15% of a person's credit score calculation comes from the length of their credit history.

Closing them could negatively affect your score by shortening your credit history, so keep old accounts open.

4. Limit new credit applications

Every time you apply for new credit, the lender runs what’s called a “hard check” into your file. This temporarily lowers your credit score. When they happen occasionally, it's not a big deal, as only 10% of a person's credit score comes from credit checks. Your score will recover in a few months. But too many could signal that you’re desperate for a loan, so try to avoid applying for several credit products within one year.

5. Diversify your credit mix

The final 10% of a person's credit score comes from having a good credit mix, like having revolving credit in the form of credit cards and installment credit like a car or student loan or mortgage. This benefits your score by proving you can manage multiple types of debt at once.

If you don't currently have one of these loans, don't run out to get one for the sake of attempting to improve your score. But remember that a mix of the three would positively contribute to your credit score.

6. Dispute credit report errors

TransUnion, Equifax, and Experian are the major three credit reporting agencies in the United States. All three are required to give Americans a free copy of their credit report once per year.

Request these and review your report for any errors that could drag down your score. If you do find mistakes, report them immediately to the agency. Credit reporting agencies have an obligation to review and correct errors.

7. Become an authorized user

A handy credit-building hack is to piggyback on another person’s good credit as an authorized user. People can request an additional credit card for an authorized user, and by doing so, the authorized user can access that line of credit.

With that said, the account holder should be cautious, as they’re ultimately responsible for any accrued debts made by their authorized users. Only do this with people you trust.

8. Use a secured credit card

Secured credit cards are designed to help people build or rebuild their credit. To get a secured credit card, you put down a deposit for the amount you want on a credit card, insuring the loan and paying yourself back.

When you’re using a secured credit card and repaying the balance consistently, the bank or lender reports this positive behavior to the credit reporting agencies. After a period of on-time payments and an increase in credit score, the bank or lender typically returns the borrower's deposit and converts the card into a regular credit card.

9. Watch for temporary drops in credit

There are a few reasons your credit score might drop that are only temporary, which means you don’t need to panic. Just give it a few months and the number will recover.

The first is a hard check, which happens when you apply for a new type of credit.

But your credit score could also take a hit when you finally pay off a loan. That happens for a few reasons: you no longer have the loan in your credit mix, your utilization might increase, and a paid-off loan is like a closed account, meaning your credit history might be “shorter.” Don’t worry — the benefits of paying off a loan on time and in full are greater, and your score will recover. Having less debt gives you more financial freedom and flexibility to practice good credit habits.

Keep an eye on your score with a free Credit Monitoring tool like EarnIn’s. You can check your score any time with no fees or credit checks required to make sure you’re on the right track.

10. Be patient

Building up your credit score will take time, especially if it’s fallen due to late payments or high utilization. Continue making timely payments — at least the minimum owed, if not more. And as your score increases, requesting higher credit limits can help you lower your usage and improve even more.

How long does it take to improve your credit score?

Ultimately, how long it takes to get a good a credit score depends on a person's financial situation. It can take anywhere from a few months to several years.

When recovering from severe credit setbacks like missed payments, loan defaults, or bankruptcies, don't get discouraged if your score takes a while to recover. The most negative things, like charged off debt or bankruptcy, fall off your report after seven years.

So hang in there! Time flies.

Track your credit score with EarnIn

It’s harder to improve your credit score if you don’t know what it is. EarnIn's Credit Monitoring tool is a free way to instantly access your credit score, track your credit usage, and receive alerts to detect potential fraud. Take charge of your finances and watch your credit goals come into focus.

Start monitoring your score with EarnIn today.

Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.

1. EarnIn is a financial technology company, not a bank. Banking services are provided by our bank partners on certain products other than Cash Out. Calculated on the VantageScore 3.0 model. Your VantageScore 3.0 from Experian® indicates your credit risk level and is not used by all lenders, so don't be surprised if your lender uses a score that's different from your VantageScore 3.0. EarnIn services may not be available in all states. Learn more: https://www.experian.com/assets/consumer-information/product-sheets/vantagescore-3.pdf