Council Post: 15 Actionable Tips To Improve Your Credit Score (2024)

Having a poor credit score can be a major roadblock to achieving financial goals and realizing the lifestyle one has always dreamed of. It can limit access to credit, increase borrowing costs and even affect employment opportunities. However, the good news is that improving a low credit score is within reach with the right strategies and mindset.

Below, 15 Forbes Finance Council members share actionable tips that can help individuals turn their credit scores around and pave the way to financial success. From understanding credit utilization to building positive payment habits, these tips are designed to empower individuals to take control of their credit and unlock a brighter financial future.

1. Use Credit

The most straightforward way to build or rebuild a low credit score is by using credit. As part of your credit-building journey, it’s important to pay off your balance each month rather than only making the minimum payments. Lastly, always ensure that any line of credit you open is with an institution that reports to the three main credit bureaus, or you may not see your credit score improve. - Matt Bochenek, Avant

2. Take Responsibility

Be honest with yourself. It's easy to cast blame on external factors that have caused your financial predicament, but it takes courage to take full personal responsibility, and the result of doing so is immeasurable. Taking responsibility for your financial decisions will liberate your mind and allow you to ingest the tips from experts in this article in a completely different manner. - Drew Gurley, Redbird Advisors

3. Get A Secured Credit Card

A secured credit card can be a good entry point to begin building or repairing a low credit score. With this type of product, you put down a security deposit and are only allowed to spend up to the deposit amount. This structure makes it more feasible to make your monthly payments and improve your credit score over time, eventually enabling you to graduate to a mainstream credit card. - Randell Leach, Beneficial State Bank

4. Consolidate Debt

There are many tools available to help consumers manage and monitor their credit. Consolidating debt into a lump sum and paying off high-interest credit cards and loans through consolidation is a good first step. Consumers should make sure that their credit usage ratio maintains low relative to their overall available line to ensure healthy credit building. - Ben Jen, Ben Jen Holdings SLLC

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5. Reduce The Outstanding Balance

One way to improve your score, and financial health, is to materially reduce the outstanding balances on credit cards. This action demonstrates mastery of self-control and good credit management while driving big savings in interest expense. Improving your available credit line also creates an emergency “safety valve” that, in turn, reduces the level of “financial PTSD” impacting American consumers. - Greg Mitchell, First Tech Federal Credit Union

6. Pay Bills On Time

This is easier said than done if you’re living paycheck to paycheck. Earned wage access (EWA) can really help; it allows people to use their wages as they earn them rather than bi-weekly or monthly. By helping to free up short-term liquidity and budget more consistently, they can pay bills on time, avoid late fees and overdrafts and, in turn, can improve their credit score. - Ram Palaniappan, EarnIn

7. Keep Your Balance Low

Try to keep spending 25% below the credit limit and make payments as early as you can, which is even more strategic than simply paying on time (which remains critical). Not only will low spending prevent you from overextending yourself and being unable to pay back your debt, but it will also help improve your score quickly. - Anthony Georgiades, Pastel Network

8. Pay Down Maxed-Out Cards

After reviewing over 100,000 credit reports, the path to a higher FICO score is to work to pay down maxed-out or high-balance credit cards. This represents 30% of your credit score and is a quick way to boost your score. You can also get a personal installment loan to pay down your cards and that can be effective too. Definitely the top tip to a higher FICO! - Leo Kanell, 7 Figures Funding

9. Work With An Accountant

Consolidating debt is often overlooked when it comes to improving a credit score. Many small business owners put expenses on personal credit cards and then harm their scores to keep their businesses afloat. Working with a skilled accountant can help them identify new opportunities for reducing their overall debt by consolidating it into low-interest options. - Nick Chandi, ForwardAI

10. Avoid Missed Payments

I will never forget my father saying, "Pay your bills on time!" Now I get it! 35% of your weighted score is your payment history. Some institutions give you a grace period, but be sure you speak with them before you miss a payment. Next up is the revolving credit ratio, which is 30% of the calculation, so work on keeping that at 20% to 30% usage. Take care of this 65% and you will see your score climb! - Will Murphy, Everlasting Capital

11. Understand Why Your Score Is Low

Young people just starting out can have low scores because they have no history. There’s a very different approach to addressing that problem than for someone with a long credit history and high balances on credit cards, for instance. Know why your credit score is low so you can know which actions will bring it up. - Todd Sixt, Strait & Sound Wealth Management LLC

12. Keep Your Oldest Account Open

There’s no overnight cure for a low credit score, but you can slowly improve it by maintaining stable credit accounts. Don’t be afraid to use credit, because a thin credit file is hard to improve. Keep your oldest account open as long as you can and only apply for new credit when you need it. Each time you apply, another credit inquiry goes on your report. Too many inquiries can hurt your score. - Luz Urrutia, Accion Opportunity Fund

13. Analyze Spending Habits

In order to help an individual improve their credit score, first analyze their current spending habits, then demonstrate how each dollar earned should have a specific use. This will help identify areas of opportunity within their own financial model where they can improve their current debt levels and overall debt structure. - Kacey Butcher, Adaptation Financial

14. Track Your Credit Score

There are many free tools that allow you not only to track your credit score but to see the different drivers of that score and the impact each has on it. By getting an understanding of why the score is what it is, you can get clarity on actionable items that will help to increase the score. - Sean Frank, Cloud Equity Group

15. Educate Yourself

Credit calculation involves different levers that change the outcome. Educate yourself! If needed, get a counselor to come up with a plan. In general, paying back on time, having low balances, monitoring regularly and having fewer credit cards help. You can also get a secured card that requires an upfront cash deposit as collateral so you never go above limits or miss payments and improve your score. - Anar Pitre, Lotus Capital Partners

Council Post: 15 Actionable Tips To Improve Your Credit Score (2024)

FAQs

How can I raise my credit score 15 points fast? ›

  1. Pay credit card balances strategically.
  2. Ask for higher credit limits.
  3. Become an authorized user.
  4. Pay bills on time.
  5. Dispute credit report errors.
  6. Deal with collections accounts.
  7. Use a secured credit card.
  8. Get credit for rent and utility payments.
Mar 26, 2024

What is the main action you can take to improve your credit score? ›

One of the best things you can do to improve your credit score is to pay your debts on time and in full whenever possible. Payment history makes up a significant chunk of your credit score, so it's important to avoid late payments.

How to increase credit score from 550 to 700? ›

Top ways to raise your credit score
  1. Make credit card payments on time. ...
  2. Remove incorrect or negative information from your credit reports. ...
  3. Hold old credit accounts. ...
  4. Become an authorized user. ...
  5. Use a secured credit card. ...
  6. Report rent and utility payments. ...
  7. Minimize credit inquiries.
Jul 27, 2023

Which action will raise your credit score? ›

Pay your bills on time

Lenders want to know they can rely on you to make regular repayments and manage your existing debt. Tardy or delinquent payments are likely to negatively impact your credit score. They'll be most interested in your payment history of the last 12 months.

What is the 15 3 credit trick? ›

The date at the end of the billing cycle is your payment due date. By making a credit card payment 15 days before your payment due date—and again three days before—you're able to reduce your balances and show a lower credit utilization ratio before your billing cycle ends.

How to raise credit score 50 points in 30 days? ›

Steps you can take to raise your credit score quickly include:
  1. Lower your credit utilization rate.
  2. Ask for late payment forgiveness.
  3. Dispute inaccurate information on your credit reports.
  4. Add utility and phone payments to your credit report.
  5. Check and understand your credit score.
  6. The bottom line about building credit fast.

How to raise credit score 20 points fast? ›

To raise your credit score by 20 points, you can dispute errors on your credit report, pay your bills on time and lower your credit utilization. Credit scores rise and fall based on the contents of your credit report, so adding positive information to your report will offset negative entries and increase your score.

How to increase credit score by 100 points in 30 days? ›

Here are 10 ways to increase your credit score by 100 points - most often this can be done within 45 days.
  1. Check your credit report. ...
  2. Pay your bills on time. ...
  3. Pay off any collections. ...
  4. Get caught up on past-due bills. ...
  5. Keep balances low on your credit cards. ...
  6. Pay off debt rather than continually transferring it.

How do I raise my credit score 40 points fast? ›

Here are six ways to quickly raise your credit score by 40 points:
  1. Check for errors on your credit report. ...
  2. Remove a late payment. ...
  3. Reduce your credit card debt. ...
  4. Become an authorized user on someone else's account. ...
  5. Pay twice a month. ...
  6. Build credit with a credit card.
Feb 26, 2024

Should I pay off my credit card in full or leave a small balance? ›

It's a good idea to pay off your credit card balance in full whenever you're able. Carrying a monthly credit card balance can cost you in interest and increase your credit utilization rate, which is one factor used to calculate your credit scores.

How fast does credit score go up after paying off a credit card? ›

How long after paying off debt will my credit scores change? The three nationwide CRAs generally receive new information from your creditors and lenders every 30 to 45 days. If you've recently paid off a debt, it may take more than a month to see any changes in your credit scores.

What raises your credit the fastest? ›

Keep paying your bills on time.

In many credit scoring formulas, your payment history has the greatest effect on your overall credit scores. So, it's critical to make payments on time. Even if you can't afford to pay your balance in full every month, try to pay the minimum — your credit scores will thank you.

How to raise your credit score 200 points in 30 days? ›

How to Raise your Credit Score by 200 Points in 30 Days?
  1. Be a Responsible Payer. ...
  2. Limit your Loan and Credit Card Applications. ...
  3. Lower your Credit Utilisation Rate. ...
  4. Raise Dispute for Inaccuracies in your Credit Report. ...
  5. Do not Close Old Accounts.
Aug 1, 2022

How to remove hard inquiries in 15 minutes? ›

If you identify an unauthorized hard inquiry, here's a detailed approach on how to remove hard inquiries in 15 minutes:
  1. Dispute with the Credit Bureau: Initiate a dispute online or via mail. ...
  2. Contact the Creditor: Engage with the lender or creditor responsible for the inquiry. ...
  3. Safeguard Your Credit:
Oct 10, 2023

What makes up 15% of your credit score? ›

The length of your credit history accounts for 15% of your score. The longer your history of making timely payments, the higher your score will be. Credit scoring models generally look at the average age of your credit when factoring in credit history.

Is a 15 point drop in credit bad? ›

It's common for credit scores to fluctuate in small increments. However, if you see a large drop of at least 15 to 20 points, you should find out the cause. This can help you determine whether it fell based on your actions, a credit reporting error or possibly identity theft.

How can I raise my credit score 100 points overnight? ›

How to Raise Your Credit Score 100 Points Overnight
  1. Become an Authorized User. This strategy can be especially effective if that individual has a credit account in good standing. ...
  2. Request Your Free Annual Credit Report and Dispute Errors. ...
  3. Pay All Bills on Time. ...
  4. Lower Your Credit Utilization Ratio.

How can I raise my credit score 14 points? ›

Paying your bills on time Is one of the most important steps in improving your credit score. Pay down your credit card balances to keep your overall credit use low. You can also phone your credit card company and ask for a credit increase, and this shouldn't take more than an hour.

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