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20 Ways To Boost Your Credit Score

A good credit score gives you more loan options, lower interest rates, and even rewards and special offers. Eventually, it can even help you save thousands of dollars and get peace of mind from knowing you can take out a loan whenever you need financing.

However, many Americans don’t have good credit. Surveys show that 30% fell into debt because of the double whammy of income loss during the pandemic and inflation. If you’re one of them, here’s some good news: you can rebuild your credit score. You don’t need a higher income—just careful, consistent financial decisions.

Key Takeaways

  • A robust credit score grants access to diverse loan options, lower interest rates, and exclusive rewards. It's a financial passport that can potentially save thousands and instill confidence in securing financing when needed.

  • With 30% of Americans grappling with debt due to pandemic-related income loss and inflation, the good news is that credit recovery doesn't demand a higher income. Instead, rebuilding hinges on careful and consistent financial choices.

1. Get a Copy of Your Credit Report

Just like a doctor needs a physical exam or lab test to diagnose a disease accurately, you need to get your credit report to find out what’s pulling down your score.

  • What you need: Your credit report from Equifax, TransUnion, and Experian (the three major credit bureaus)
  • How to get it: You can get a copy of all three reports from You can send an online request or call their hotline at 1-877-322-8228. You’re entitled to one free report a year. There are also free websites where you can retrieve your credit scores.
  • What to do next: Check why your score is low. Factors include payment history, credit card balances, your credit mix (or the different kinds of loans or credit cards you have), and the age or length of your credit accounts.

Now that you’ve diagnosed the problem, you can make a plan. But first, follow the next steps to increase your score for each factor.

2. Avoid Late Payments

Payment history makes up 35% of your credit score, so you must prioritize paying bills on time to improve your rating.

  • Keep track of due dates. You can use a money management app or Google Calendar. Set up notifications so you never accidentally overlook a bill. Keeping your bill payments up today can add a solid 50 points to your credit score.
  • Fix your budget. If you consistently miss payments because you are out of cash, it’s time to revisit your budget and make hard decisions. Where can you cut down or eliminate expenses? Usually, the spending categories that have more flexibility are food, groceries, and entertainment. For example, you can save a lot simply by cooking instead of ordering takeout.
  • Automate payments from your bank account. This is fast, convenient, and forces you to stick to your budget because the amount has already been deducted from your living expenses.

What if money’s tight this month, and you need a couple of days to raise the cash? You have up to 30 days after the due date to settle the bill before it’s reported to the credit bureaus.

If you foresee needing more than a month, call the creditor to ask if you can adjust the due date—if you pay bills regularly and are a long-time customer, they may agree.

3. Check for Errors

Your credit score may have been pulled down by 200 points because a creditor did not report a payment, incorrect accounts because of someone with a similar name or identity theft, duplicate accounts, outdated credit limit information, or closed accounts that remain open in the report.

Report errors to the credit bureau to improve your credit score.

4. Reduce Your Credit Utilization to 30%

Credit utilization is how much of your credit limit you are using. There are two possible ways to fix this:

  • Pay off remaining balances. Call the lender to discuss payment plans (if most of your debt comes from one credit card or loan). If you have several outstanding debts (like balances on multiple cards), start by paying off the card with the highest balance.
  • Ask for an increase in your credit limit. Credit card providers may be willing to increase your limit if you have been a long-time customer or if you can show additional income. If that is not an option, consider taking out a line-of-credit loan, where you are given a credit limit and are only charged when you borrow money.

5. Improve Your Credit File

Another common problem is when you don’t have any credit history because you’ve never taken out a loan or gotten a credit card. So, lenders don’t have any basis for your score. As a result, you may be approved for smaller personal loans but not for a car loan or a mortgage.

That’s why you need to establish your creditworthiness by taking out personal loans and then paying them off on time for your overall financial health. You can also sign up for programs like UltraFICO and RentTrack or apps like Altro that will report other financial factors—like banking history or rental payments—to bureaus.

6. Don’t Close Old Accounts

Á lot of financial advisers will tell you to cancel credit cards you don’t use. While that is true, since you save on fees and prevent overcharging, don’t cancel your oldest cards. The length or age of credit affects your score. If you don’t want to use it, just cut up the card but keep the account open.

Plus, canceling a card that you’ve already paid off while keeping cards where you have a balance will affect your credit utilization ratio.

7. Diversify Your Credit Mix

A credit mix is how many different credit or loan accounts you have. The types of credit are:

  • Installment loans. With this loan, you borrow a specific amount of money and then pay it off through regular payments over a set period. Examples: personal loans, student loans, and credit cards.
  • Revolving debt. You have a credit limit and can borrow any amount anytime as long as you stay within it. Examples: credit cards, home equity loans, and lines of credit.
  • Mortgage accounts. While mortgages are paid off in installments, they differ because the interest rate can be fixed or variable.
  • Open accounts. These are loans or accounts where you must pay the balance at each month's end. Example: collection accounts. 

Credit mix accounts for 10% of your credit score. A good credit mix shows that you can handle different loan responsibilities. For example, revolving credit shows that you always pay on time, while installment credit shows that you can pay off bigger amounts. 

8. Don’t Apply for Several New Accounts at Once

While taking out a credit card or loan can improve your credit score, you mustn’t apply for several simultaneously. Credit bureaus may think that too much borrowing is a sign that you need money quickly. 

9. Consider Consolidating Your Debt

Debt consolidation can help lower your credit utilization and allow you to pay off one lender. Just check to see if there are any fees for transferring the loan or if the lender has any penalties for ending a loan early. 

10. Ask To Be an Authorized User of a Card

If you know a friend or family member with a high credit score, ask if they can add you as an authorized user of a credit card they’ve used for a long time.

They don’t even have to give you the card, (and you definitely shouldn’t take advantage of them). It helps pull up your score by improving your credit utilization ratio, payment history, etc.

11. Get a Credit-Builder Loan

A credit-builder loan is an excellent starting point for those looking to establish or rebuild their credit. These loans are designed to help you build a positive credit history. Lenders typically place the borrowed funds into a secured account, and as you make timely payments, a positive payment history is reported to the credit bureaus, gradually improving your credit score.

12. Seek Out a Secured Credit Card

Secured credit cards are a valuable tool for individuals with limited or damaged credit. These cards require a security deposit, serving as collateral against your credit limit. Responsible use, such as making on-time payments, can contribute to a positive credit history and potentially lead to an unsecured card in the future.

13. Get Credit for Monthly Bill Payments

Certain credit scoring models now consider alternative data, including your monthly bill payments such as rent, utilities, and subscriptions. Enroll in services that report these payments to credit bureaus, helping to showcase your responsible financial behavior and positively impact your credit profile. It is not guaranteed but adding utility payments and other regular payments to your credit can add up to 100 points, depending on your circumstances. 

14. Limit New Lines of Credit

While it may be tempting to open new lines of credit, doing so can have a temporary negative impact on your credit score. Each new application typically results in a hard inquiry, which can slightly reduce your score. Be strategic about opening new accounts and only do so when necessary.

15. Apply for Loans Within a Short Period

When shopping for a mortgage or an auto loan, multiple inquiries within a short time period are often treated as a single inquiry by credit scoring models. This recognizes that individuals may be rate shopping for the best terms without penalizing them for each inquiry.

16. Pay Off Credit Card Balances Every Month

Consistently carrying credit card balances can lead to accumulating interest and negatively affect your credit utilization ratio. Aim to pay off your credit card balances in full each month to maintain a low credit utilization rate, positively impacting your credit score.

17. Ask for Credit Line Increases

If you've been responsible for your credit usage, consider requesting a credit line increase. This can improve your credit utilization ratio and potentially boost your credit score. Ensure that your income and financial situation support the request for an increase.

18. Periodically Use “Dormant” Credit Cards

Credit cards that you haven't used in a while may be considered dormant. Periodically making small purchases and promptly paying them off can keep these cards active and positively contribute to your credit history.

19. Pay Off Cards with the Highest Balances First

If you have multiple credit cards with varying balances, prioritize paying off the cards with the highest balances first. This not only reduces your overall debt but can also positively impact your credit utilization ratio.

20. Get Professional Guidance

This may be considered a more extreme option, but credit counselors are professionals who specialize in boosting credit scores. If you really need to bump up your score to buy a house or refinance an asset, you can't do much worse than working with a legitimate credit counseling company.

Building and maintaining good credit is a gradual process that requires strategic planning and responsible financial habits. By incorporating these steps into your financial routine, you can take control of your credit and pave the way for a more secure financial future. Remember, consistency is key, and patience will yield rewarding results over time.

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