In a Nutshell
There is no single action that will instantly improve your credit scores. But by developing consistent financial habits, such as paying bills on time and keeping your credit card balances low, you can build a positive credit history and improve your credit over time.Your credit scores can play a significant role in your financial life, potentially affecting whether you’re approved for a new loan or credit card and the interest rate you might receive.
Improving your credit scores is a process of building positive financial habits over time. While you have many different credit scores, the key factors that influence them — like your payment history and how much credit you use — are generally the same across different scoring models.
That means the steps you take to build a stronger credit history can help you improve all of your scores.
It’s good practice to monitor your credit and understand the factors that can affect your scores. On Credit Karma, you can monitor your VantageScore 3.0 credit scores from Equifax and TransUnion for free to track your progress.
- Ways to improve and build credit
- How can I improve my credit score fast?
- FAQs about improving your credit scores
Ways to improve and build credit
It’s helpful to remember that you have many different credit scores. You may see different scores because there are multiple credit-scoring models, like those from FICO® and VantageScore (and different versions of each).
Plus, the three main credit bureaus — Equifax, Experian and TransUnion — may not have the same information on your credit reports since not all lenders report to all three. Timing can also be a factor, as your account information may be reported to the bureaus at different times of the month.
Despite these differences, the tactics for building a positive credit history are broadly the same. Here are some ways to help improve your credit scores over time.
1. Pay your bills on time
Payment history is typically the most influential factor in both FICO® and VantageScore scoring models. A history of consistent, on-time payments can demonstrate to lenders that you are likely to pay your debt back on time, which could increase your credit score. Conversely, missed or late payments can significantly lower your scores.
2. Keep your credit card utilization low
Your credit utilization ratio is the amount of revolving credit you’re using divided by your total credit limits, and it’s another major factor in your credit scores. Lenders may see a high utilization ratio as a sign of potential risk.
Paying down your credit card balances can lower this ratio and may help improve your scores. Most experts recommend keeping your credit utilization below 30%.
3. Review your credit reports and dispute errors
Errors on your credit reports, such as an incorrect late payment or an account that doesn’t belong to you, could negatively affect your scores. It’s a good practice to review your credit reports from all three major bureaus regularly.
If you find an inaccuracy, you have the right to dispute it with the credit bureau. Credit Karma’s Direct Dispute feature lets you dispute errors on your TransUnion credit report from the Credit Karma app.
If a dispute results in the error being corrected or removed, you may see an improvement in your scores.
4. Sign up for free credit monitoring
Credit monitoring services can alert you to important changes on your credit reports, such as a new account being opened in your name or a hard inquiry. This can help you spot suspicious activity and potential signs of fraud.
Addressing fraudulent activity promptly can prevent it from negatively affecting your credit scores.
5. Pay your credit card bill twice a month
Instead of making one large payment, consider making smaller payments every two weeks. This strategy can help lower your average daily balance and keep your credit utilization ratio down throughout the month, which can positively affect your scores.
It can also help you pay down your principal balance faster and save money on interest.
6. Ask for a credit limit increase
A higher credit limit can help lower your credit utilization ratio, as long as your spending habits remain the same. Be aware that some credit issuers may perform a hard credit inquiry when you request an increase, which can cause a temporary dip in your scores.
7. Become an authorized user on someone else’s account
If you have a limited credit history, becoming an authorized user on the account of someone with established credit habits may help you build your own credit.
The account’s payment history will be added to your credit reports, which could have a positive impact. However, any negative activity on the account, like missed payments or high balances, could also carry over to your credit. It is important to choose someone you trust who has a positive credit history.
8. Get a secured credit card
Secured credit cards are designed for people who are building or rebuilding credit. They typically require a cash security deposit, which often become your credit limit. By making regular, on-time payments, you can establish a positive payment history, which is a key factor in building good credit.
And keep in mind you’ll also want to keep your credit utilization low for these cards to benefit your credit scores.
9. Get a credit-builder loan
A credit-builder loan is specifically designed to help people build credit. The lender places the loan amount into a locked savings account, and you make fixed payments over a set term. The lender then reports these payments to the credit bureaus, helping you build a positive payment history.
Credit Karma offers Credit Builder, which can help members build credit with on-time payments.
10. Diversify your credit mix
Your credit mix refers to the different types of credit you have, such as credit cards (revolving credit) and installment loans (like auto or mortgage loans). While this factor has a smaller impact on your scores, lenders generally like to see that you can responsibly manage different types of credit.
But remember you shouldn’t take out a loan you don’t need simply to improve your credit mix.
11. Report rent and utility payments
Some third-party services allow you to add your history of on-time rent and utility payments to your credit reports. For people with a limited credit history, this can be a helpful way to add positive payment information to their files and potentially build their credit.
12. Set up autopay to ensure on-time payments
Setting up automatic payments for your recurring bills can help you avoid missing a due date. This can help you build a consistent, positive payment history over time, which is crucial for improving your credit.
13. Negotiate a lower interest rate
Contacting your credit card issuer to request a lower interest rate could help you pay down your balance faster, though there’s a chance that the issuer won’t approve the request.
With a lower rate, more of your payment goes toward the principal balance instead of interest charges. Lowering your balances can, in turn, reduce your credit utilization and help improve your scores.
How can I improve my credit score fast?
While there is no way to instantly raise your credit scores, some actions may lead to a more immediate change than others. Actions like paying down high credit card balances to lower your credit utilization or successfully disputing an error on your credit reports can sometimes result in a quicker score change.
However, building a strong credit history is a long-term process that relies on consistent, positive financial habits. Be cautious of strategies that could be counterproductive.
- Don’t apply for multiple new credit cards at once. While more available credit could lower your overall utilization, each application will likely result in a hard inquiry, which can temporarily lower your scores and make you appear as a riskier borrower.
- Don’t take out a loan just to improve your credit mix. Only apply for new credit when you actually need it.
- Don’t carry a balance to build credit. Carrying a balance on your credit card is not necessary to build credit and will likely lead to interest charges. It can also increase your credit utilization, which may hold your scores down.
- Don’t close old credit cards. Unless there is a compelling reason, like a high annual fee, keeping older accounts open can benefit the length of your credit history.
Next steps
Improving your credit takes time and patience. The most effective approach is to focus on establishing and maintaining healthy financial habits, like making all your payments on time and keeping your balances low.
Regularly monitoring your credit reports can help you track your progress, check for errors, and spot any signs of fraudulent activity. Credit Karma offers free credit monitoring that can alert you to key changes on your Equifax and TransUnion credit reports.
Staying informed about your credit health empowers you to make financial decisions that support your long-term goals.
FAQs about improving your credit scores
Credit score ranges differ by model. For example, under VantageScore 3.0®, a “Good” score is between 661-780, while FICO® 8 and 9 categorize 670-739 as “Good” and 740-799 as “Very Good.”
While there’s no overnight fix, actions like paying down credit card debt to lower your utilization, becoming an authorized user on someone else’s well-managed account and disputing errors can help boost your credit more quickly than starting from scratch.
Rebuilding credit is a gradual process that starts with consistent, on-time payments. Negative marks, such as late payments, generally stay on your credit report for seven years, while bankruptcies may remain for up to ten years. As time passes and positive behavior accumulates, your score naturally improves.
Applying for a new card can temporarily lower your score due to a hard credit inquiry and shortening your average account age. That said, the impact is typically minimal and fades as your accounts age.
Start by opening a credit-builder loan or a secured credit card that reports to the credit bureaus, paying your bills on time and keeping your credit usage low. Over time, consistent payments can help establish credit.
Credit Builder plan requires you to open a line of credit and a Credit Builder savings account, both banking services provided by Cross River Bank, Member FDIC. Credit Builder savings account is a deposit product, insured up to $250,000. Credit Builder is serviced by Credit Karma Credit Builder. Members with a TransUnion credit score of 619 or below at the time of application may be prompted to apply for Credit Builder. If your score increases over 619, you may no longer see these prompts.