How To Improve Your Credit Score Fast: 8 Tips and Tricks

Your credit score is a number that shows lenders your risk level – in other words, how likely you are to repay any loans you take out. This three-digit number is used to determine whether you’ll be approved for a loan or line of credit. The higher the number, the more creditworthy, or less of a risk, you’re perceived to be. Your credit score is one of your most important assets, and if your score isn't what you want it to be, here are a few tips and tricks on how to improve your credit score.

Credit scores may vary by model. To learn more about how credit scores work, read our guide on the differences between FICO^® and VantageScores^®.

What’s A Good Credit Score And Can You Increase Yours?

A good credit score is typically a FICO^® Score of at least 670. If your score is below that range, there are many ways to improve your credit score and recover from past mistakes. Your credit score is one of your most important assets, and earning and maintaining a good credit score is one of the most important things you can do for your financial health.

There are two main types of credit score — the FICO^® Score and VantageScore^®. The two types of score are calculated in a fairly similar manner, but there are a few important differences between your FICO^Ⓡ Score and VantageScore^Ⓡ that you'll want to keep in mind. Generally speaking, the following factors are what make up your credit score.

• Payment history, as determined by the three major credit bureaus
• Average age of accounts
• Mixture of accounts
• How many recently opened accounts you have
• Overall credit utilization

Remember that you can get your free credit score in several different ways if you are unsure what your current credit score is.

8 Tips For How To Improve Your Credit Score

If you're working on improving your credit score, the following tips may be able to help.

1. Pull Your Credit Report Regularly

It's important to regularly look at your credit report, and review it for any inconsistencies or incorrect information. You can get a free credit report every year from each of the major credit bureaus. Review it and look for signs of identity theft or any incorrect or inaccurate information. Consider signing up for credit monitoring services to get notifications of fraudulent or suspicious activity on your credit report.

2. Avoid Missed Payments

One of the biggest factors that makes up your credit score is your payment history. Lenders use your past payment history as a predictor for how likely you are to repay any future loans. Make sure that you regularly make your monthly payments on the due date. Consider setting up your accounts on autopay, so you never miss a payment.

3. Report Rent Payments And Utilities To Build Credit

Even if you don't have loans or credit card accounts, you can still work on building your credit by reporting some of your other payments to the major credit bureaus. Several of the major credit reporting agencies have programs that allow you to show proof of paying rent and different types of utilities. This can help to boost your credit score by showing a reliable history of making regular monthly payments.

4. Diversify Your Types Of Credit

Another factor that makes up part of your credit score is having different kinds of credit. Lenders have found that having several different forms of credit is a positive factor. If you only have one type of credit or loan (such as a credit card), it can be a good idea to take out new lines of credit, like a car loan, home mortgage or installment loan if you need it. Of course you will want to make sure that you can reliably make the payments on any new lines of credit that you take out.

5. Watch Your Credit Utilization

One other important factor that makes up to 30% of your credit score depending on the scoring model is your credit utilization. Your credit utilization is a percentage that tells you how much of your available credit you are using. If you have one credit card with a $10,000 credit limit and you have an average balance of $2,000, then your credit utilization ratio is 20%. Having a low credit utilization can help you increase your credit score. One way to improve your credit utilization is to avoid having a high balance on any of your credit cards.

6. Prioritize Delinquent Accounts

If you have any delinquent accounts, you'll want to prioritize them and make sure that you are getting them out of delinquency. Past due or delinquent accounts can have a large negative impact on your credit score. One of the most important things you can do to help improve your credit score is to make sure all of your accounts are in good standing. One debt management strategy to consider is credit card consolidation.

7. Stay Below Your Credit Limit

We've already mentioned how your credit utilization ratio is an important factor that makes up your credit score. One way to keep your utilization ratio down is to be aware of the credit limit on your cards. If you have a high balance, it will raise your utilization ratio and likely lower your credit score. If you are constantly approaching your credit card's limit, consider asking for a credit limit increase.

8. Consider A Secured Credit Card

If your credit is currently at a spot where you may not qualify for a standard unsecured credit card, consider getting a secured credit card. Typically, the minimum credit score for a secured card is much lower than the score needed for an unsecured card. With a secured card, you put money down upfront that serves as your credit limit. As you regularly make on-time monthly payments, you may be able to convert your secured card into a traditional unsecured credit card. This can be an effective way to boost your credit score.

How Long Does It Take To Raise Your Credit Score?

Raising your credit score is more of a marathon than a sprint. Beware of companies that tout the ability to raise your credit score quickly. In most cases, raising your credit score can take months if not years of hard work and dedication. Making regular payments, keeping your balances low and diversifying your credit types are all things that take time. If you feel overwhelmed about the whole process, concentrate on one thing at a time, such as eliminating your debt by using the debt snowball strategy.

Events That Can Impact Your Score

If you damaged your credit in the past, the good news is that you can improve it over time. As you dispute errors, pay down debt, make on-time loan repayments and avoid opening new credit accounts, you improve and repair your credit. It may take months or even years to bounce back, but if you plan on buying a new home, car or other big-budget item, it’s worth the time and effort.

Although these are guidelines for the maximum impact of negative events, it’s worth noting that not everyone is affected in the same way. If you have a longer history of good credit, a single negative event won’t affect you as adversely as it would if you had a short history filled with negative credit issues.

The Bottom Line

Your credit score is a number ranging from 300 to 850 that represents your overall creditworthiness. Because your credit score is used by lenders, landlords and even potential employers, a good credit score can be one of your most important financial assets. If you are working on improving your credit score, two things you'll want to do are pay off all of your bills in full each and every month and keep your overall credit utilization ratio low.

You can also consider signing up for the Rocket Money^SM app to help track your credit score and keep an eye on spending.