Many unexpected things happen to good, hardworking people that affect them financially. Battling a long-term illness can cause missed time from work and an inability to pay your bills on time. Often, economic struggles begin small, and you think you will catch up. Before you know it, you’ve missed a few payments, and your credit score is plummeting. We wish we could tell you there is a quick fix for a low credit score, but there just isn’t. However, with dedication and time, you can get back to your desired credit score and begin to move on with your life. With these 12 tips, you can learn how to improve your credit score. 

12 Steps to Improve Your Credit Score

#1: Monitor your credit report.

You will first need a copy of your credit report. You can get one copy for free each year from three different credit reporting agencies: Equifax, Experian, and TransUnion. You should take advantage of your free reports and check them at least once every few months. I would even suggest you check it monthly for at least the first year.

#2: Correct any errors on your report.

If you see anything that doesn’t seem right on your credit report, call and follow up with the credit card company or financial institution. There could be accounts showing as unpaid that you remember paying. Mistakes do occur, and you can have the errors removed. 

#3: Determine where you need to improve.

In your credit report, you will see where you need to improve, contact information for creditors, and your credit score. Check your payment history, your credit utilization ratio, your recent inquiries, and any collections accounts reported. 

#4: Pay your bills on time.

Nothing affects your credit score worse than not paying your bills on time. If you are forgetful, put due dates on your phone’s calendar and set reminders. You can also schedule automatic payments with billing companies or through your bank to ensure your payments are on time. 

#5: Catch up late payments.

If you have late payments, catch them up. This process can be complicated if you have gotten far behind on payments. Each month, make your minimum payment and add whatever you can toward the past-due amounts owed. The quicker you catch up on your late payments, the better off your credit score will be.

#6: Pay off collection accounts.

Removing accounts that are in collection can help improve your credit score. Be careful with any collection accounts 24 months or older, because paying these off can make them “active” on your report and hurt your credit score. If you are paying off collection accounts, try to negotiate directly with the lender instead of a collection agency. Just because you pay off an account that is in collections, it does not mean they will remove it from your account. Try to get that promise in writing before making the payment.

#7: Consider Experian Boost

Signing up for Experian Boost may increase your credit score. You will need to give the site access to your bank account. The service will then check your account for on-time payments. Doing so will give you credit for paying your everyday bills, like your power bill or cell phone bill. 

#8: If you have credit cards, keep the balances low.

The amount of your credit limit that you have used affects your credit utilization ratio (more on this later). A high credit utilization ratio can hurt your credit score. It is best to keep your credit card balances lower than one-third of your total credit amount.

#9: Request a credit limit increase.

A credit limit increase can give you a better credit utilization ratio. Consider asking for a credit increase for accounts that you have paid timely.

#10: If you don’t have a credit card, considering getting one.

Owning a credit card and responsibly paying it off can help raise your credit score. There are options for people looking to start credit, build credit, and maybe even fix their credit. If your score is low, you may need to begin with a secured credit card, which can be an excellent way to raise your credit score. Just be sure to make your payments on time and keep your credit utilization ratio low. 

#11: Keep your inquiries at a minimum.

Don’t apply for too many cards at once. When you apply for a credit account, the lender checks your credit report. Lenders also note these checks on your account as credit inquiries. Although credit inquiries don’t have a significant impact on your score, they do have some effect. Too many questions will lower your credit score. Also, too many new accounts opened at once can hurt your score.

#12: Build your credit history.

Another factor that affects your credit report is the length of time you have had your accounts. Creditors like to see that you have maintained your accounts and payments for long periods. 

Bonus Tip

Debt consolidation could be the answer to lower interest rates and combined monthly payments. Look for a credit card company that offers balance transfer deals. Transferring a retail credit card with a 14 to 25 percent APR to a credit card with a 0 to 4 percent fee can help you reduce your credit card debt faster. Because it will require a hard inquiry on your credit report and a change in your accounts,  debt consolidation can negatively affect your credit score at first. With steady payments, however, you can decrease your debt and raise your credit score. 

Also Read: The Truths You Should Know About 30-Year Fixed Mortgage Rates

Improve Your Credit Score

Credit Scores

FICO Score

FICO stands for Fair Isaac and Co. It is a score used to determine the merit of someone’s credit. When it originated in 1989, its primary purpose was to see if buyers were qualified for mortgage loans. In total, there are 49 different FICO scores, each targeting a different lending requirement.

Why Do You Need a Good Credit Score? 

Lenders use your credit score to determine whether they can trust you to pay them back for loans. Who would have thought three numbers could have such a high impact on your life? If you have a high credit score, you are believed to be trustworthy and dependable when it comes to making your monthly payments. If you have a below-average credit score, lenders will think just the opposite: that they can’t depend on you to make your payments timely.

The result of a low score will be denials for purchases like buying a new car or for getting approved for a rewards credit card. There are some companies out there that will approve borrowers with no credit or bad credit, but it usually results in the purchase of an inferior product or high-interest rates. The bottom line is that the higher your credit score is, the better deal you are going to get when it comes to financing something.

Also Read: Save a Ton With Costco Travel

Credit Score Ranges and Requirements

Credit scores range from very poor to exceptional. Here is a look at the  score range:

  • Very Poor: 300-579
  • Fair: 580-669
  • Good: 670-739
  • Very Good: 740-799
  • Exceptional: 800-850

Big Purchases

Many big purchases require a predetermined minimum credit score. For example, you may have seen or heard advertisements on the TV and radio that promise that you can buy a new car with a 1.5 percent APR and no down payment. You can be sure that if your credit score is not high enough, you will not qualify for that deal. The same thing goes for credit card companies who offer sign up bonuses and perks for their members. You will not be eligible for a top credit card with great benefits if you do not meet the minimum score requirement.

Here are a few examples for average credit score minimum requirements:

  • A home: 662 to 730 is the average score required across the U.S. The  score range varies by state and is dependent on what finance company you use. 
  • A new car: 714 is the average score needed.
  • A used car: 678 is the average  score needed.
  • An unsecured credit card: 670-800 is the average score required for most cards that earn rewards. There are some cards available for lower credit scores that are designed to start with a low balance and help you build credit. 

Improving Your Credit Score

Improving your credit score is essential because having a good credit score is necessary to get many of the things you will want and need in life. Maybe you prefer to buy things with cash and don’t like keeping up with monthly payments. You can make both large and small purchases with cash. However, unless you are bringing in millions per year, you are likely going to need to finance something at some point in your life. Improving your credit score can help you buy the home you have been dreaming of with an interest rate you can afford. A high credit score can help qualify you for that sports car or SUV that you want while also saving you thousands in interest fees.

Also Read: 8 Ways to Make Money Online Fast

The Impact of a Credit Score

Credit scores can even affect your chances of renting an apartment and having your utilities turned on. The first thing any rental company wants from you is a completed credit application. If your score comes back too low, they may deny your request or require you to pay a large deposit. Likewise, power companies and cable companies use your social security number to run credit checks on you before activating your  services. With a low credit score and poor payment history, you can expect to pay a deposit. 

Many employers require a credit check for any new hires. The likelihood is that they will not see your credit score, but they will get a glimpse at your credit report. Employers may assume that you are irresponsible if you are not paying your bills on time. Solid credit reports are especially important for jobs in the field of finance or managing— people who handle money frequently. A bad credit report could keep you from  getting the job

It Takes Time

The time it will take you to raise your credit score will depend on how low it is, your current financial situation, and the steps you take to improve it. However, expect it to take at least three to six months of effort before you start seeing an increase in your credit score. 

Most accounts, including collection accounts, remain on your account for seven years. A repossessed car or eviction from a rental property will stay on your credit report for seven years. A Chapter 13 bankruptcy will also remain on your credit report for seven years, while a Chapter 7 bankruptcy is likely to be on your credit report for ten years.

Even if you have terrible marks on your credit report, you can still raise your score if you make your finances a priority. It can take years to fix a bad credit report, but it is worth the patience and effort. 

Suggested Reading: What to Know About First-Time Homebuyer Grants

What Really Affects Your Credit Score?

Several factors affect your overall credit score. Your payment history will have a massive impact on your score, while credit inquiries will have a small effect. All these factors work together to paint the picture of your financial responsibility and reliability. That means that to raise your score, you will need to work on changing all of the things that affect it. 

Payment History

Your payment history is the thing that has the most substantial effect on your credit score. Continuously making late payments, or missing payments altogether is the quickest way to see your credit score plummet. A missed payment will first be reported when 30 days late. The longer it goes unpaid, the more significant its effect on your score. 

Credit Utilization Ratio

The next big thing to affect your credit score is your credit usage. Here is where the credit mentioned above utilization ratio comes in to play. This ratio reflects the difference between your total credit limit and the total amount you owe on any revolving credit accounts (such as credit card companies use). Many also call it the debt-to-income ratio. Maxing out your credit cards will increase your credit utilization ratio and lower your credit score. Conversely, making your payments before the due date can reduce your ratio. 

Closing accounts you have paid off can negatively affect your credit utilization. If you close a card that is paid off, you also take away that available credit. That can result in a higher utilization ratio, thereby lowering your credit score. To prevent this from occurring, keep paid accounts open until you reduce other accounts. I had a friend who would put her credit card in a cup of water and freeze it when she was trying to limit the use. Do whatever works for you to prevent yourself from using a card you are trying not to use. 


Your credit-mix is the makeup of your credit report and is determined by the different types of revolving and installment loans you have. Installment loans are things like mortgages, student loans, and other personal loans. Revolving credit, such as credit card accounts, has a minimum amount due each month based on your spending habits. While your credit-mix doesn’t affect your score as do payments and balances, it does contribute to a healthy overall credit report. 

Read Also: Tips & Tricks for Saving for College

Balance Increases

Balance increases can also affect your score. For example, if you make a large purchase with your credit card, your credit report will show a balance increase. That is because credit card companies report to the three major credit bureaus monthly, usually before your statement is due. This type of change does not have a huge impact, but you should remember to make higher payments to prevent that increase from rising. 

Length of Credit History

The length of your credit history has some impact on your credit score. Your credit rating can be affected by the age of your oldest account and of your newest account, as well as by the average age of your accounts.

Number of New Accounts

Having too many new accounts may not affect your credit score, but it can alter how other lenders view your report. If you apply for a line of credit and you have just opened several other credit accounts, you could be denied. Creditors worry that too many new accounts can get you in trouble financially. 

Hard Inquiries

Hard inquiries show on your report when a lender asks for a copy of your credit report. These credit checks can affect your credit score by as many as five points. That may not sound like a lot, but every aspect counts when you are trying to increase your score or reach a minimum requirement. Soft inquiries occur when you are price shopping for things such as auto loans or home mortgage loans. Because it is expected in these instances that multiple companies will check your credit report, only the first one counts as a hard inquiry. Any other checks for the same type of loan during the same period will count as a soft inquiry, which does not affect your score. Creditors view price shopping as a responsible move on the consumer’s part. 

Getting Evicted

Being  evicted from a rental property can affect your credit score. Eviction reports show in the public records section of your credit report. A judge will have to enter a judgment ordering you to pay past due rent to the landlord. Judgments lower your credit score and can prevent you from renting other properties. 

Common Myths: Things That Will Not Affect Your Score

Many things affecting your credit report; you might start to believe that all unpaid accounts or major life changes can affect your credit score. But don’t worry; those outstanding library fees will not send your credit score diving. However, leaving any debts unpaid can eventually come back to bite you, so we recommend that you pay what you owe. Here are a few common  myths about things that affect your credit score. 

Unpaid Parking Tickets

Parking tickets are part of a city’s municipal records. They may result in officials booting your car or suspending your license. Parking tickets, however, will not be reported to the credit bureau. 

Getting Married

Getting married will not change your credit report or credit score. The idea that “two become one” does not apply to your credit reports; each spouse maintains his or her credit score and history. However, if your spouse defaults on a loan or doesn’t pay a creditor, you can be held responsible for the debt, but that is a conversation for another  article

Checking Your Credit Score

No matter how many times you check your credit score, it will not affect your report (though it could affect your pocketbook if you are paying for multiple reports). You can look at your credit report as many times as you want. We recommend that you view it as often as you can to see the changes that are occurring. 

No Credit? No Problem

Everyone has to start somewhere. The likelihood that you are going to have an excellent credit score when you are just beginning life as an adult is not very high. Credit is something you have to build. As long as you follow all of our advice when you get started, you can quickly begin to climb the credit mountain. Here are a few tips to start building your credit.

Improve Your Credit Score

Apply for a Credit Card

Many retail stores have natural approval processes for first-time lenders. But beware: they usually carry a high-interest rate and low limits. To increase your score, you will need to make small purchases and pay them promptly. There are even several options for college students. Building your credit while you are still in school will give you better opportunities when you graduate. Having a good line of credit can come in handy when you have to start paying back those student loans. 

Get a Secured Credit Card

If you can’t qualify for a credit card, consider a secured card. Secured cards are credit cards that require you to pay an amount upfront (e.g., $300), and then you have access to that money, much like with a debit card. Do not confuse the two though. If you spend responsibly with a secured card, the lender may offer you a traditional credit card with an increased spending limit.

Apply for a Secured Loan

More often than not, a lender will approve you for a secured loan with no credit, but you may have a high-interest rate. If you have collateral to offer against the loan, it may decrease your interest. You can also get someone with established credit to cosign with you to reduce your interest rate. 

Get Added as an Authorized User

Convincing someone (such as a family member) with excellent credit to add you to their account as an authorized user can boost your credit score. Choose wisely, though, because you could be similarly—but negatively—affected if their credit is bad. 

Credit Cards That Can Boost Your Credit

As previously stated, you can start building your credit with a secured credit card. Secured cards act like a savings account, but report to credit bureaus for on-time payments. You will be required to pay a deposit up to your initial approval amount. You can use the card for purchases like you would a regular credit card. If you make your payments on time and maintain the balance, you can increase your credit score and the balance on the card. The next step up could be a traditional credit card. Here are some examples of secured cards.

Capital One Secured Mastercard

  • $49, $99, or $200 refundable deposit
  • $0 Annual fee
  • 26.99 percent variable APR
  • Make the minimum required deposit and get an initial $200 credit line
  • Make your first five monthly payments on time, get a credit increase
  • Pick your monthly due date

Discovery It Secured Credit Card

  • You choose a deposit amount up to approved credit limit
  • $0 Annual fee
  • Deposit is refundable
  • Two percent cash back on up to $1,000 on purchases made at gas stations and restaurants
  • One percent cashback on all other purchases
  • FICO credit score free

A Quick Recap

First, know where you stand. Request your credit report from all three credit bureaus at least once a year. We recommend that you check your report at least once a month for the first year. Credit Karma offers a free credit report monitoring service that will notify you of changes to your report. Second, pay all your bills on time. Third, reduce your debt. Reducing debt is crucial for not only having more money in your pocket but also for lowering your debt-to-income ratio.

Be especially careful with credit card debt. Small charges can add up quickly, leaving you stuck making payments that are only going towards interest. Lastly, remember that it will take time to raise your credit. But it will be worth it.

Remember, as John Quincy Adams said, “Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish.”

What methods have worked best to help raise your credit score? Share your experiences in the comments below.

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Way to go Meara. Excellent advice for all credit types. This by far is the most uptodate n think-out-box type advice I’ve come across yet.


How I do this and who I contact

Nora Borosak

Hi Luis,

Please refer to the article for additional information and tips. Thanks for reading!

Brenda Garrett

My credit was excellent, I had several credit cards but always paid them off so I kept a 0 balance. I got hooked up and signed the papers to buy a Windam time share while I was vacationing in Las Vegas. I never activated they account and requested they cancel the contract but they refused. I have not made any payments and now it is in collection. This deal had hurt my credit a lot. I am 70 years old and I refuse to keep this but mY advice is don’t buy a timeshare, it’s impossible to get it cancelled.

Bernice jackson

Very good information