8 Ways to Improve Credit Score ASAP

A low credit score can mean low odds of loan approval or higher interest rates. Here are 8 tested strategies to improve your credit score fast.

January 25, 2024

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Maintaining a good credit score is central to achieving financial well-being. A higher credit score not only makes it easier to get approved loans and credit cards, but also leads to lower interest rates and favorable terms. If you’re trying to figure out how to improve your credit score quickly, here are some proven strategies to consider. 

Review and dispute errors in your credit report

Start by pulling a copy of your credit report from all three major credit bureaus (Equifax, Experian, and TransUnion). You can also obtain a free credit report and credit score from AnnualCreditReport.com

Carefully review your own credit report for any inaccuracies like incorrect personal information, fraudulent credit card accounts, identity theft, or late payments that were incorrectly reported. 

Dispute these errors by contacting credit bureaus through a written letter or an online dispute form. Their timely removal can result in a significant and speedy improvement in your credit score.

Pay your bills on time 

One of the biggest factors impacting your credit score is your payment history, which is why it’s crucial to always make payments on time and in full. 

To lenders and credit bureaus, when you miss a payment or submit it late, you’re showing a lack of responsibility in managing credit obligations. This can signal financial instability and lead to a decrease in your credit score.

Late payments don’t typically appear on your credit report until they are 30 days past due or delinquent –– but once they’re reported, they can remain on your credit report for up to seven years. 

The severity of the impact that late payments have on your credit score depends on several factors, including the timeliness and frequency of late payments. Multiple late payments and a pattern of delinquency can result in a more significant negative impact on your credit score.

To minimize the negative impact of late payments on your credit score, it’s important to make timely payments and avoid missing due dates. Setting up automatic payments or reminders can help ensure that you stay on track with your monthly payments.

Reduce credit utilization ratio

Another major contributor to your credit score ranges, credit utilization ratio (CUR) refers to the percentage of your available credit that you’re currently using. For example, if you’re using $2,000 every month of your available $10,000 credit limit, your credit utilization ratio is 20%. 

High credit utilization can negatively impact your credit score. Aim to keep your credit utilization below 30% of your total credit limit. Any higher, and this could demonstrate to credit bureaus that you’re spending above your means. Ideally, lenders are looking for you to use your line of credit without leaning on it too much. 

If your current credit utilization ratio is higher, consider paying down your debts aggressively and using your debit card for your monthly purchases. Lowering it will demonstrate responsible credit management and positively impact your credit score.

Request a credit limit increase

When you request a credit limit increase, you’re essentially asking your credit card issuer to raise the maximum amount you can borrow on your card. This increased credit limit provides a larger buffer between your outstanding balances and your total available credit. The result is a lower credit utilization ratio.  

You’re more likely to be considered for a credit limit increase if you’ve consistently demonstrated responsible credit behavior, such as making timely payments. To apply for a credit limit increase, you may need to provide your current income, employment status, and other relevant financial details. 

Diversify your credit mix

Credit mix refers to the variety of credit types that an individual has access to, such as credit card debt, mortgages, installment loans, and student loans. A diverse credit mix is important because it provides a more comprehensive view of an individual’s ability to manage different types of credit. Lenders and credit scoring models view a well-rounded credit mix as a sign of responsible credit behavior. 

To diversify your credit mix, consider these options: 

  • Credit builder loans: These loans are designed to help individuals establish a credit profile for the first time. They can also help with credit repair. To get a credit builder loan, you’ll first make a deposit, which the lender will keep in a secure bank account. As you repay the loan, the lender will report your positive payment history to the credit bureaus, contributing to your credit history and overall mix. Then, at the end of the term, you will receive the loan balance.

  • Personal loans: This type of installment loan is popular for debt consolidation, paying for home improvements, or covering unexpected expenses. Including a personal loan in your credit mix demonstrates your ability to manage and repay unsecured installment debt. 

  • Secured credit cards: Secured credit cards require a security deposit. Your credit limit is typically capped at the amount of your deposit. Responsibly using a secured credit card and making on-time payments can help you establish a positive credit history. Unlike loans, secured credit cards are a type of revolving credit, adding diversity to your credit mix. 

While diversifying your credit mix is beneficial, it’s essential to do so responsibly. Opening multiple credit accounts within a short timeframe — or using the extra accounts as a justification to take on more debt — can have negative impacts on your credit score. 

Be cautious about opening new accounts

When you apply for new credit, the lender typically pulls your credit file, conducting what’s called a “hard inquiry”. Each hard inquiry can lead to a slight decrease in your credit score. 

While the impact is usually small, multiple inquiries can add up, potentially resulting in a more significant decrease. This is particularly relevant when you’re actively seeking new credit, such as applying for credit cards, loans, or mortgages. 

Lenders and credit score models, including VantageScore and FICO Score, interpret a flurry of new credit applications as a sign of risky financial behavior. Opening multiple new lines of credit in a short timeframe may suggest financial instability or the potential for taking on more debt than you can manage. 

Hard inquiries typically stay on your credit report for about two years. However, their influence on your score is most significant in the first few months. 

Become an authorized user

If you have a trusted family member or friend with a long-standing, positive credit history, ask them to include you as an authorized user on their credit card. Becoming an authorized user means you can use the credit card as if it were your own, and also piggyback off the account holder’s credit history. Here are some ways it can improve your credit score: 

1. Building positive payment history: If the primary cardholder has a history of making timely payments and maintaining a low credit utilization ratio, that positive payment history can be reflected on your credit report. This can help boost your credit score and demonstrate your creditworthiness.

2. Establishing credit history: If you're new to credit or have a limited credit history, being added as an authorized user can help you establish a credit history. The primary cardholder's credit account, with its positive payment history, can provide a foundation for your credit profile.

3. Increasing your available credit: Being an authorized user can also increase your available credit. The credit limit on the primary cardholder's account will be factored into your credit utilization ratio depending on the credit model. A lower credit utilization ratio, which is the amount of credit you're using compared to your total available credit, is generally better for your credit score. 

It's important to note that the impact of being an authorized user on your credit score can vary. It depends on factors such as the credit card company's policies, how long you've been an authorized user, and the overall health of the primary cardholder's credit account. Additionally, not all credit scoring models may consider authorized user accounts in the same way, so the impact on your credit score may vary across different scoring models. 

Address debt in collections

When a debt goes to collections, it means the original creditor has given up on collecting the payment and has enlisted the services of a third-party debt collector to do so for them. Addressing any debt you have in collections is a proactive step toward improving your credit score and financial standing. 

First, obtain detailed information about any debts that are currently in collections. Contact the debt collector to negotiate a settlement. Many collectors are willing to agree to a reduced payment amount if it means they can get at least some of their investment back. Document any agreements in writing before making payments. 

After settling the debt, check your credit report to make sure the account is either removed or marked as paid. Keeping an eye on your report is essential to confirm that the negative information is accurately reflected. 

Frequently Asked Questions

Building credit can be a tricky process. Here are some answers to commonly asked questions about it. 

How quickly can you improve your credit score?

While there’s no instant credit-score fix, you can make significant improvements to your score by working diligently over time. 

  • Short-term improvements: Some tasks can improve your score in just a few weeks to a few months. These include disputing errors on your credit report, negotiating with collections companies, and paying off small balances to reduce your overall debt-to-income ratio. 

  • Mid-term improvements: You can improve your score over the course of several months by more seriously reducing credit card balances and maintaining consistent on-time payments, which will result in an improved payment history.

  • Long-term improvements: To improve your score within a year to several years, pay off your bigger debts, wait for negative information to age off your credit score, and allow the length of your credit history to grow. 

How is credit score calculated?

Credit scores are calculated using complex algorithms designed to analyze an individual’s credit history. While the exact formulas used by credit scoring models are proprietary, here’s what we know about the key elements. As an example, here’s how FICO’s credit score calculations work:

  • Payment history (35%): The most significant factor is your payment history. This is a measure of how consistently you’ve paid your bills on time. Late payments, missed payments, defaults, bankruptcies, and other negative payment behaviors can significantly impact your score.

  • Credit utilization (30%): Your credit utilization rate measures the ratio of your credit card balances to your maximum credit limits. Lenders see lower utilization rates as positive, which is why you should try to keep this ratio below 30% when you can.

  • Length of credit history (15%): This is a measure of how long your credit accounts have been active. It considers both the average age of your accounts and the age of your oldest account. The longer your credit history, the stronger this portion of your score. 

  • Credit mix (10%): Credit scoring models assess the variety of credit accounts you have, including credit cards, installment loans, mortgages, and other types of credit. 

  • New credit (10%): Credit inquiries and newly opened credit accounts fall under this category. Opening multiple accounts in a short period can negatively affect your credit score. However, certain types of inquiries, like those related to rate shopping for a mortgage or auto loan, are treated differently. 

How can I build credit if I have bad or no credit?

Building credit when you have bad credit or no credit history can be challenging, but it’s possible with these strategic steps. 

  • Get a secured credit card: These require a cash deposit. Responsible use establishes a positive credit history.

  • Become an authorized user: Ask someone with good credit if you can be an authorized user on their credit card account. Their positive history may reflect on your credit report. 

  • Apply for a retail store credit card: Obtain a new credit card with lenient approval terms. Make small purchases and pay the balance in full each month. 

  • Take out a credit builder loan: These secured loans require an initial deposit, but lenders start reporting your responsible repayment behavior to credit bureaus right away. 

  • Sign up for rent reporting services: Some services report rent payments to credit bureaus, helping you build credit. 

  • Get a student credit card: These are one of the best credit card options for students, as they come with student-specific perks and manageable credit limits.

  • Use a credit-boosting service: Services like Experian Boost will broaden the scope of payments credit bureaus consider when calculating your score. These could include regular bills or subscription services as well as credit card and loan payments.

  • Sign up for credit monitoring: Borrowers can sign up for credit monitoring services, which send out alerts whenever credit accounts are updated. This can help you keep better track of your credit over time. 

Get financial products customized to your needs

An excellent credit score can help you get approved for new lines of credit, qualify for better interest rates, and get closer to your personal finance goals. Some of the best ways to improve your score include lowering your credit utilization ratio or adding to your credit mix. 

If you’re looking to take out a new loan or apply for a new credit card with a higher credit limit, consider shopping through Navient Marketplace. With Navient Marketplace, you can compare lenders1 and credit card issuers2 for free all in one place. Just enter a few details about yourself and get personalized results from lenders in seconds..

Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.

1 Navient customers are invited to consider personal loan offers through our partner Fiona. Navient has not shared your information with Fiona and is not involved in the personal loan application process in any manner.  All information is submitted directly to Fiona and any personal loan offers are made directly by participants in Fiona’s lending platform, powered by Even Financial.  Even Financial, Inc. is the industry-leading embedded financial marketplace and independent subsidiary of MoneyLion Inc. (“MoneyLion”) (NYSE:ML). Checking your rate will not affect your credit score. Eligibility is not guaranteed and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions.

Loan proceeds may not be used for postsecondary educational expenses, including refinancing federal or private student loans.

2 Navient has partnered with CardRatings for our credit card products. Navient and CardRatings may receive a commission from card issuers. Opinions. reviews, analyses & recommendations are Navient's alone, and have not been reviewed, endorsed or approved by any of these entities. 

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