Your credit score affects almost every major financial decision you make. It can be the difference between getting approved for a mortgage, landing a great credit card, or paying sky-high interest rates on a loan. The problem? Many people don’t even realize their credit score is holding them back.
Even worse, your credit score might be suffering because of mistakes that aren’t your fault. A study by the Federal Trade Commission found that at least 5% of consumers had credit report errors so serious they were paying higher rates on loans and insurance. And for those who disputed errors, one in five saw their score improve enough to qualify for better terms.
That raises a big question: how many people are overpaying on loans and credit cards just because they haven’t checked their credit report? The good news is that improving your credit score is absolutely possible, and it doesn’t have to take years.
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How to Improve Your Credit Score in 13 Steps
Whether your score needs a complete overhaul or just a few tweaks, these 13 steps will help you take control of your credit and unlock better financial opportunities.
Step 1: Check Your Credit Report for Free
The first step to improving your credit score is knowing what’s on your credit report. You’re entitled to a free credit report from Equifax, Experian, and TransUnion once every 12 months. The easiest way to get them is through AnnualCreditReport.com.
Some states allow additional free reports, and if you’ve been denied credit recently, you may qualify for an extra one. Checking your credit report won’t hurt your score, and it’s the best way to catch mistakes or signs of identity theft before they cause bigger problems.
Once you have your reports, go through them carefully. Look for anything that doesn’t seem right, like accounts you don’t recognize, incorrect balances, or late payments that you know were on time. Identifying these issues early gives you the chance to fix them before they do more damage to your credit score.
Step 2: Check Your Credit Score
Your credit report tells you what’s being reported, but your credit score is what lenders actually use to evaluate your creditworthiness. Since different lenders use different scoring models, it’s important to check your score regularly to see where you stand.
You can purchase your official FICO score from MyFICO, but you don’t always have to pay for it. Many credit cards now offer free FICO scores as a perk, making it easy to track your progress over time.
Knowing your credit score helps you understand what kind of interest rates and loan terms you might qualify for. If your score isn’t where you want it to be, don’t worry—the steps ahead will help you raise it.
Step 3: Spot and Fix Credit Report Errors
Mistakes on your credit report can lower your credit score and cost you money in higher interest rates. Many people don’t realize they have incorrect information hurting their credit history until they check their reports. Reviewing your credit report for accuracy is a key step in improving your score.
Credit Report Accuracy Checklist
- Incorrect amounts owed: If the balances on your credit accounts are listed incorrectly, your credit utilization may appear higher than it actually is, which can hurt your score.
- Accounts that don’t belong to you: If you see an account you don’t recognize, it could be a reporting error or identity theft. Any unfamiliar debt should be disputed.
- Incorrect delinquencies: Late payments can seriously damage your credit score, and stay on your credit report for up to seven years. If you see a late payment that you know was made on time, it should be corrected.
- Inaccurate collection accounts: Some collection agencies report accounts incorrectly, hoping to pressure people into paying. If a collection account shows up that doesn’t belong to you or is misreported, it should be removed.
- Duplicate collections accounts: If the same collection account is listed multiple times, it can unfairly lower your score. Make sure only one listing remains.
Step 4: Disputing Inaccuracies
If you find mistakes on your credit report, disputing them is one of the fastest ways to improve your score. Credit bureaus are required to investigate disputes and either verify or remove inaccurate information, but you have to take the first step.
Start by sending a dispute letter to the credit bureau that’s reporting the error. You can do this online, by mail, or by phone, but mailing a written dispute with proof of delivery is the best way to ensure there’s a record of your request.
When a dispute is filed, the company that reported the information—such as a lender or collection agency—must prove that it’s accurate. If they can’t provide evidence, the credit bureau must remove it from your report.
For collection accounts, a debt validation request can also be sent directly to the collection agency. They have 30 days to provide proof that the debt is yours and that they have the right to collect it. If they fail to do so, they must stop reporting it to the credit bureaus.
Once an error is removed, your credit score may increase, sometimes significantly. Staying on top of disputes and following up if necessary can make a big difference in your credit health.
Step 5: Pay Your Bills on Time
Your payment history is the most important factor in your credit score, making up 35% of the total calculation. Even one late payment can cause a noticeable drop in your score, and the longer a bill goes unpaid, the worse the impact.
If an account is 30 days late or more, creditors can report it to the credit bureaus, damaging your score and making it harder to qualify for credit in the future. A bill that becomes seriously delinquent can lead to charge-offs or collections, which are even more harmful.
The best way to avoid late or missed payments is to set up automatic payments or reminders for all recurring expenses. Many banks and creditors offer free auto-pay options, ensuring that your payments are made on time every month.
If you’ve missed payments in the past, the key is to get back on track as soon as possible. The longer you maintain a streak of on-time payments, the less impact past mistakes will have on your credit score.
Step 6: Pay Down Your Debt
The amount of debt you carry has a big impact on your credit score. In general, lenders prefer to see a balance between different types of credit, but revolving debt—like credit cards—tends to hurt your score more than installment debt.
Installment loans, such as mortgages, auto loans, and student loans, have set repayment terms with fixed monthly payments. These accounts are viewed more favorably because they show structured repayment. Revolving credit, like credit cards, allows for flexible payments but can be riskier if balances get too high.
Since credit mix accounts for 10% of your credit score, having both types of credit is helpful. However, if you’re carrying credit card debt, paying it down should be a top priority. The debt snowball or debt avalanche method can help you develop a repayment strategy that fits your situation.
Step 7: Keep Your Credit Utilization Low
Your credit utilization ratio—the amount of credit you’re using compared to your total limit—is a major factor in your score. High balances can make you look risky to lenders, even if you pay on time.
To keep your utilization low, experts recommend staying under 30% of your total credit limit, though under 10% is even better. If possible, avoid maxing out any single card and try to spread balances across multiple accounts. Requesting a credit limit increase can also help lower your utilization ratio, as long as you don’t increase spending.
Another strategy is to make payments before your statement closes so your balance appears lower when reported to the credit bureaus. Even if you pay in full each month, high reported balances can still affect your score. Managing when and how you pay can help keep utilization in check.
Step 8: Use Credit Responsibly
Having credit available isn’t enough—you need to use it wisely to build and maintain a strong credit score. Lenders want to see consistent, responsible use of credit, which means borrowing only what you can afford to repay and making payments on time.
Using your credit card for small, regular purchases and paying the balance in full each month is an easy way to show responsible credit use. Even if you don’t need credit right now, keeping your credit accounts active with occasional charges can help maintain a positive payment history.
Avoid behaviors that can hurt your credit score, like making late payments, maxing out credit card accounts, or applying for too much credit at once. Good habits over time will strengthen your credit profile and improve your chances of getting the best rates on future loans.
Step 9: Keep Positive Accounts Open
The length of your credit history plays a key role in your credit score. Even if you don’t use an older credit card, keeping it open can help maintain a strong score—especially if it has a long history of on-time payments. Closing an account can shorten your average account age and reduce your total available credit, both of which can negatively impact your score.
There are exceptions. If a credit card has an annual fee that isn’t justified by rewards or benefits, it may be worth closing. But in most cases, an older account with no balance can be an asset to your credit profile.
Another way to build credit history is by becoming an authorized user on someone else’s credit card. If the primary account holder has a long-standing account with on-time payments, that positive credit history can be added to your credit report. However, if they miss payments, it could hurt your credit score instead. If you go this route, make sure the account is well-managed before being added.
Step 10: Limit New Credit Applications
Every time you apply for a new credit card or loan, the lender runs a hard inquiry on your credit report. A single inquiry may only lower your score by a few points, but multiple inquiries in a short period can add up and make you look like a riskier borrower.
To keep your credit score strong, only apply for new credit when necessary. If you’re shopping for a mortgage or auto loan, multiple inquiries within a short window—usually 14 to 45 days—are typically counted as one, minimizing the impact on your score.
Opening new accounts can also lower the average age of your credit history, another factor that affects your score. Being strategic about when and how often you apply for credit can help protect your score while still allowing you to access the credit you need.
Step 11: Open a Secured Credit Card
If you’re looking to build or rebuild your credit, a secured credit card can be a great starting point. Unlike regular credit cards, secured cards require a refundable deposit, which serves as your credit limit. This makes them easier to qualify for, even if you have a low credit score or no credit history.
By using a secured card for small purchases and paying the balance in full each month, you can establish a positive payment history. Most secured cards report to all three major credit bureaus, helping you boost your credit scores over time. After several months of responsible use, many issuers allow you to upgrade to an unsecured card.
Not all secured credit cards are the same, and some offer better terms than others. If you’re considering this option, check out our list of the best secured credit cards to find one that fits your needs.
Step 12: Take Out a Credit Builder Loan
A credit builder loan is designed to help you build credit by making small, manageable payments over time. These loans are often available through credit unions, community banks, and online lenders.
When you take out a credit builder loan, the lender holds the loan amount in a secured account. You won’t be able to access the funds right away, but as you make on-time payments, the lender reports them to the credit bureaus. Once the loan is fully repaid, you receive the money, and your payment history helps strengthen your credit score.
If you’re considering this option, check out our list of the best credit builder loans to find one that fits your needs.
Step 13. Ask for a Credit Limit Increase
Requesting a higher credit limit can be an easy way to improve your credit score. A higher limit lowers your credit utilization ratio, which is a key factor in your score. The lower your utilization, the better your credit profile looks to lenders.
Before asking for an increase, make sure your account is in good standing. Credit card companies are more likely to approve your request if you have a history of on-time payments and responsible credit use. Many credit card issuers allow you to request a credit limit increase online or by phone, and some even offer automatic increases over time.
Just be sure not to increase your spending along with your limit. The goal is to reduce your credit utilization, not create more debt.
Another Option: Consider Professional Credit Repair Services
Improving your credit takes time and effort, but if the process feels overwhelming, a credit repair service can help. These companies handle disputes, send validation letters, and follow up with credit bureaus on your behalf.
If you’re dealing with multiple errors on your credit report or struggling to get negative items removed, working with a reputable credit repair company can save you time. While you can dispute inaccuracies on your own, professionals know how to navigate the process efficiently.
If you’re considering this route, be sure to choose a trusted service with a strong track record. The money you invest in credit repair can pay off in the long run by helping you secure better interest rates and loan terms.
Frequently Asked Questions
What factors have the biggest impact on my credit score?
The two most important factors are payment history and credit utilization. Payment history makes up the largest portion of your score, so even one missed payment can cause a significant drop. Credit utilization—how much of your available credit you’re using—comes next. Keeping your balances low, ideally below 30 percent of your total credit limit, helps maintain a strong score.
Other factors like the length of your credit history, credit mix, and new credit inquiries matter, but they have less impact than these two key areas.
What is a good credit score?
Credit score ranges vary by scoring model, but with FICO, a score of 670 to 739 is considered good. A good credit score improves your chances of getting approved for credit cards, loans, and mortgages with lower interest rates.
How long does it take to improve your credit score?
The time it takes to improve your score depends on your starting point and the actions you take. If your score is already decent, a few months of on-time payments and lower credit utilization can make a difference. If your score is low, it may take a year or more to see significant improvement.
What is the fastest way to improve your credit score?
Becoming an authorized user on someone’s well-managed credit card can provide a quick boost. Paying down high credit card balances, disputing errors on your credit report, and making all payments on time can also help raise your score faster.
