How to raise your credit score: steps that actually move it

The steps that do the most for your credit score are paying every bill on time, paying down credit card balances and fixing errors on your credit reports. Some changes, like a lower card balance, can show up within a billing cycle or two. Others, like building a record of on-time payments, take months or years.

Your score affects whether you’re approved for credit and the APR you’re offered on cards and loans. Knowing what goes into it helps you focus on the steps that matter and skip the ones that don’t.

Key takeaways

• Payment history and amounts owed are the two biggest factors in FICO Scores, making up about 35% and 30% for the general population.
• Paying down card balances can raise your score once your card issuer reports the lower balance.
• You can check your credit reports from all three nationwide bureaus for free every week at AnnualCreditReport.com, and disputing errors costs nothing.
• Most negative information can stay on your reports for seven years, and bankruptcies for up to ten. No one can legally remove accurate, current information.

What goes into your credit score

FICO Scores are among the most widely used credit scores, and they’re calculated only from the information in your credit report. FICO groups that information into five categories:

Category	Approximate weight
Payment history	35%
Amounts owed	30%
Length of credit history	15%
New credit	10%
Credit mix	10%

FICO says these weights reflect the general population, and the importance of each category can differ from person to person. Someone with a short credit history, for example, is scored differently from someone with decades of accounts.

VantageScore, another scoring company, uses its own formula. Different models, versions and credit bureaus can produce different scores for the same person on the same day. When you track your progress, compare the same score from the same source over time.

Step 1: Pay every bill on time

Payment history is the most important factor in a FICO Score. Lenders want to know whether you’ve paid past accounts as agreed.

The simplest protection is automatic payment for at least the minimum due on every card and loan. Keep enough money in the linked account, and check that each payment goes through. If you’d rather pay by hand, set calendar reminders a few days before each due date.

A missed payment generally isn’t reported to the credit bureaus until it’s at least 30 days past due, according to Equifax and TransUnion. You may still owe a late fee sooner, but paying before the 30-day mark can keep the late payment off your reports.

If you’re already behind, bring the account current as soon as you can. If you can’t pay the full amount, contact the lender before the next due date to ask about a payment plan or hardship program, and get any agreement in writing. An accurate late payment can stay on your report for up to seven years, but its effect on your score fades as you add newer on-time payments.

Step 2: Pay down your credit card balances

How credit utilization works

The amounts-owed category looks closely at your credit utilization: the share of your available revolving credit you’re using. To find it, divide your card balance by the card’s limit.

Say you have two cards with a combined limit of $6,000 and balances totaling $2,400. Your overall utilization is 40%. Pay the balances down to $1,200 and it drops to 20%. It’s worth checking each card as well, since a single card near its limit can count against you even if your overall ratio is modest.

Using a high percentage of your available credit can hurt your FICO Scores, while using a low percentage can help. FICO notes that in some cases a low utilization ratio helps more than not using your cards at all.

Timing your payments

Card issuers usually report balances to the bureaus about once a month, and the balance they send is often the one on your statement. If you pay down a card before the statement closes, the lower balance is more likely to be the one that gets reported. Ask your issuer when it reports if you’re unsure. You still need to make at least the minimum payment by the due date.

If you’re working out how much you can put toward your balances each month, a simple budgeting method such as the 50/30/20 rule can help you find the money.

Be careful about closing old cards

Closing a card you’ve paid off removes its credit limit from your total, which can push your utilization up if you carry balances on other cards. Before you close an account, weigh its annual fee against its effect on your available credit. Asking for a higher credit limit can lower your utilization too, as long as you don’t spend more. Ask the issuer whether the request involves a hard inquiry.

Step 3: Check your credit reports and fix errors

Get your free reports

All three nationwide credit bureaus, Equifax, Experian and TransUnion, let you check your credit reports for free once a week at AnnualCreditReport.com. The FTC says it’s the only website authorized to fill orders for the free reports you’re entitled to by law. Look-alike sites may try to sell you services or collect your personal information.

Each bureau may get its information from different sources, so review all three. Look for:

• Accounts you don’t recognize
• Late payments you believe you made on time
• Wrong balances or credit limits
• The same debt listed more than once
• Old negative items that should have aged off

Dispute mistakes

If you find an error, start by disputing it with each bureau that shows it. Explain what’s wrong, ask for it to be removed or corrected, and include copies of documents that support your case. Then dispute it with the company that supplied the information, known as the furnisher.

Credit bureaus and furnishers generally must investigate within 30 days of receiving your dispute, and it doesn’t cost you anything. If an error is corrected, your score can change once the updated information is used. If the account belongs to someone who opened it in your name, report identity theft at IdentityTheft.gov, the FTC’s recovery site.

Step 4: Be selective about new credit

When you apply for credit, the lender’s hard inquiry appears on your report. According to FICO, one additional inquiry takes less than five points off most people’s scores. Inquiries stay on your report for two years, but FICO Scores count only those from the past 12 months.

Rate shopping for a mortgage, auto loan or student loan is treated differently. FICO Scores group multiple inquiries for these loans made within a short period into one. That window is 45 days in the newest versions of the scoring formula and as short as 14 days in older ones. FICO Scores also ignore these inquiries in the 30 days before you’re scored. Doing your comparison shopping within a few weeks limits the effect.

Checking your own credit report or score doesn’t lower your FICO Scores, as long as you get it directly from a bureau or another authorized provider.

Opening several new accounts in a short time can also lower the average age of your accounts, which matters more if your credit history is short.

Step 5: Build credit if your file is thin

If you have little or no credit history, the goal is to add accounts that report on-time payments to the bureaus. Common options include:

• Secured credit card: you put down a cash deposit, which usually becomes your credit limit. Keep the balance low and pay it off each month.
• Credit-builder loan: offered by some banks and credit unions. The lender holds the loan money in an account while you make small payments, often over six to 24 months, then releases it to you at the end.
• Authorized user: someone adds you to their credit card account. This can help if they pay on time and keep the balance low, and hurt if they don’t. Ask whether the card issuer reports authorized users to the bureaus.

Check that any account you open reports to all three bureaus. Debit cards, prepaid cards and payday loans generally don’t help you build a credit history, because those payments aren’t reported to the nationwide bureaus. Rent, utility and phone payments often don’t appear either, unless the company or a reporting service sends them.

How long it takes

There’s no fixed timeline, but some changes work faster than others:

• Lower card balances: can show up after your issuer’s next report to the bureaus, often within a month or two.
• Corrected errors: disputes are generally investigated within 30 days.
• New on-time payments: add up gradually and gain weight as your history grows.
• Negative information: most can be reported for seven years. Lawsuits and judgments can be reported for seven years or until the statute of limitations runs out, whichever is longer, and bankruptcies for up to ten years.

Watch out for credit repair scams

Companies that promise to “fix” your credit can’t remove information that’s accurate and current. The FTC says it’s illegal for credit repair companies to lie about what they can do for you or to charge you before they’ve done the work. Everything they can legally do, such as disputing errors, you can do yourself for free.

Frequently asked questions

How fast can you raise your credit score?

It depends on what’s holding it down. Paying down high card balances or fixing a reporting error can raise a score within a month or two, once the new information is reported. Recovering from late payments or a collection account takes longer, because those items stay on your reports for years.

Does checking your own credit lower your score?

No. Checking your own credit report or score doesn’t affect your FICO Scores when you get it from a bureau or another authorized source. Hard inquiries from applying for new credit are what can have a small effect.

Should you close credit cards you don’t use?

Closing a card can raise your utilization by reducing your total available credit, especially if you carry balances on other cards. Consider the card’s annual fee and your overall limits before deciding.

How long do late payments stay on your credit report?

An accurate late payment can generally be reported for up to seven years. Its effect on your score usually lessens as it gets older and you add on-time payments.

Is it better to carry a small balance or none at all?

You don’t need to carry a balance or pay interest to build credit. What counts is the balance reported on your accounts compared with your limits. FICO says low utilization can sometimes help more than not using your available credit at all, but paying in full each month avoids interest.

Can a credit repair company remove late payments?

Not if they’re accurate and current. Only errors can be removed, and you can dispute those yourself for free with the credit bureaus and the company that reported them.