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This article was last updated Oct 01, 2020. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.
Your credit score affects everything from the interest rate you’ll pay on an auto loan to whether you’ll be hired for certain jobs, so it’s understandable if you’re wondering how to raise your credit score quickly.
While there are no shortcuts for building up a solid credit history and score, there are some steps you can take that can provide you with a quick boost in a short amount of time. In fact, some consumers may even see their credit scores rise as much as 100 points in 30 days.
- Check and understand your credit score
- Lower your credit utilization rate
- Ask for late payment forgiveness
- Dispute inaccurate information on your credit reports
- Add utility and phone payments to your credit report
- The bottom line about building credit fast
Check and understand your credit score
It’s important to know that not all credit scores are the same, and that they fluctuate from month to month, depending on which credit bureaus lenders use and how often lenders report account activity. So, while you shouldn’t worry if you see your scores rise or fall by a few points, you should take note when a big change occurs.
The two main consumer credit scoring models are the FICO Score and VantageScore. Here are the factors that comprise your FICO Score and how much each factor is weighed:
- Payment history (35% of your score)
- Amounts owed (30% of your score)
- Length of credit history (15% of your score)
- Credit mix (10% of your score)
- New credit (10% of your score)
And below are the factors influencing your VantageScore:
- Total credit usage, balance and available credit (extremely influential)
- Credit mix and experience (highly influential)
- Payment history (moderately influential)
- Age of credit history (less influential)
- New accounts (less influential)
There are a variety of options for checking your credit score for free.
For example, consumers can get a free FICO Score from the Discover Credit Scorecard even without having a Discover credit card, and a free VantageScore by creating a MyLendingTree account. American Express and Capital One also offer free credit scores to both card account holders and the general public, though many other card issuers offer free access only to their cardholders.
Here are the tiers that credit scores can fall into, according to FICO:
|800 or more||Exceptional credit|
|740 to 799||Very good credit|
|670 to 739||Good credit|
|580 to 669||Fair credit|
|580 or less||Poor credit|
Lower your credit utilization rate
The typical guidance from personal finance experts is to use no more than 30% of your credit limit, which applies both to individual cards and across all cards. For example:
- On a card with a $500 credit limit, spend no more than $150.
- On a card with a $700 credit limit, spend no more than $210.
- On both cards (a $1,200 combined limit), spend no more than $360.
How much will this action impact your credit score? Reducing your balances is the single most effective way to boost your credit score. Provided you have no derogatory marks on your credit reports, such as late payments or delinquencies, you are guaranteed to see a big jump in your scores quickly if you knock down your balances to $0 or close to zero.
Still, if your utilization is currently over 30%, and simply paying the debt off immediately isn’t a viable option, there are a few other ways to lower your credit utilization rate.
Option 1. Request a credit limit increase
Another way to reduce your credit utilization ratio if you’re carrying high balances is to bump up your credit limits. For example, if you’re carrying $700 in debt on a card with a $1,000 credit limit, your credit utilization is 70%. If you’re successful in increasing your credit limit to $2,000, then your utilization rate drops to 35%.
Some issuers make it easy to request a credit limit increase via your online account. For example, Citi allows cardholders to make such a request on the “Credit Card Services” page:
You can also call the number on the back of your card to make the request. Know that some issuers may conduct a hard pull on your credit before granting you a higher credit line, which can ding your credit score a few points. Your score will recover, but inquire exactly how your request will be handled before you allow them to proceed so you know what to expect.
Note: If you’ve only had the card a few months, have a history of late payments or are carrying really high balances, your request may be denied until you’re seen as a less risky customer.
How much will this action impact your credit score? The impact a credit line increase could have on your credit score depends on much of an increase you get. If it’s enough to bring your utilization under 30%, you should see a reasonable increase in your score. However, it won’t improve your score as much as paying off your balance and bringing your utilization to or near zero. (Note that your score can temporarily dip about 5 to 10 points if your issuer performs a hard pull.)
Option 2. Apply for a new credit card card
Applying for a new credit card is also a tactic that could reduce your credit utilization ratio. By adding a new line of credit, you’re essentially boosting your overall credit line, which can help if you’re unable to quickly pay down existing credit card debt.
Before you apply, determine the following:
- What type of credit card you need. If you have poor or fair credit, you’ll want to consider a card meant to help you build a good credit history, such as a secured card. Secured cards require a deposit in the amount of your credit limit, and protect the issuer in case you default on the debt. On the other hand, if you have good credit or better, you could choose to apply for a card that earns rewards or offers an introductory APR period.
- If you prequalify for any cards. Some issuers — such as Chase, Capital One and Discover — allow consumers to check if they prequalify. While prequalification doesn’t guarantee you’ll be approved once you apply, it does indicate a better chance.
How much will this action impact your credit score? Much like requesting a credit limit increase, the amount that getting a new card can improve your credit score depends on the credit limit you’re granted on the new card. The lower it brings your utilization, the better for your score.
Consider the following examples:
- Carrying $700 on a card with a $1,000 limit is 70% utilization. If you’re approved for a new card with a $1,500 limit, your overall utilization drops to an acceptable 28%.
- But if the new card only has a $300 limit, your utilization will still be high, at about 54%.
In the first example, opening a new credit card could improve your credit score substantially. However, in the second example, it’s likely you’ll see your score improve — just not by as much.
And again, applying for a new card will result in knocking your score down a few points when the issuer checks your credit, but the benefit you may see from lower utilization can quickly offset that temporary ding.
Option 3. Pay your card off with a personal loan
A quick way to zero out your credit card debt and boost your credit utilization ratio could be achieved by paying it off with the proceeds from a personal loan. Personal loans are issued by banks, credit unions and online lenders.
Using a personal loan to pay off high-interest credit card debt has the benefit of giving you a set monthly payment and a set repayment time period. It also reduces your credit utilization, because a personal loan is considered installment credit rather than revolving credit (like credit cards) and doesn’t count toward your utilization rate.
Plus, having a personal loan as well as a credit card can improve your credit mix, which accounts for 10% of your credit score.
The interest rate for a personal loan typically ranges from 5% to 36%. Note that some lenders may charge fees — for example, an origination fee when you take out the loan, or a prepayment fee if you pay the loan off early.
How much will this action impact your credit score? When you’re trying to improve your credit score quickly, time is of the essence. Some lenders, such as traditional banks and credit unions, may take days or weeks to approve your application and disburse your funds. However, there are banks and online lenders that move much more quickly.
For example, Wells Fargo may approve some applicants in as little time as a few minutes, while online lender LendingClub reported that in 2018, a majority of LendingClub customers received funds within four days.
Applying for a personal loan does generate a hard inquiry, which typically decreases your score anywhere from 5 to 10 points. However, the inquiry will fall off your credit reports in two years — and once the loan funds have been used to pay off all or most of your credit card balance, having a decreased utilization rate should improve your credit score significantly.
Ask for late payment forgiveness
Paying on time constitutes 35% of your FICO Score, making it the most important action you can take to maintain a good credit score. But if you’ve been a good and steady customer who accidentally missed a payment one month, then pick up the phone and call your issuer immediately.
Be ready to pay up when you ask the customer rep to please forgive this mistake and not to report the late payment to the credit bureaus. Note that you won’t be able to do this repeatedly — requesting late payment forgiveness is likely to work just once or twice.
You have 30 days before you’re reported late to the credit bureaus, and some lenders even allow as long as 60 days. Once you have a late payment on your credit reports, it will stay there for seven years, so if this is a one-time thing, many issuers will give you a pass the first time you’re late.
How much will this action impact your credit score? If you’re a day or two late on a credit card payment, you might get hit with a late fee and a penalty APR, but it shouldn’t affect your credit score yet. However, if you miss a payment by a whole billing cycle, it could drop your credit score by as many as 90 to 110 points.
If you fall 30 days or more behind, you can try sending a “letter of goodwill” or “goodwill adjustment” to the credit card issuer. In this letter, you’ll take responsibility for the late payment and request the issuer remove it from your credit reports. The issuer isn’t required to comply, but for a loyal customer with a good record, it doesn’t hurt to ask.
Dispute inaccurate information on your credit reports
Sometimes, your credit score might suffer because something wound up on your credit reports that shouldn’t have been there. Of course, you won’t know unless you check them.
Under normal circumstances, consumers are entitled by federal law to one free credit report every year from each of the credit bureaus — Equifax, Experian and TransUnion — accessible through annualcreditreport.com. However, during the coronavirus pandemic, the bureaus are allowing consumers to access their reports weekly through April 2021.
If you spot legitimate, incorrect information while reviewing your reports, such as accounts that aren’t yours, a name mix-up with another person or incorrectly reported payments, you can file a dispute. The Consumer Financial Protection Bureau, a federal agency responsible for protecting consumers and offering financial education, provides dispute instructions for each bureau.
It’s worth taking a look at your reports, even if you have no reason to suspect there might be a problem. According to a 2017 report from the Consumer Financial Protection bureau, incorrect information constituted the top credit reporting gripe among 17% of complaints.
How much will this action impact your credit score? While some disputes might be resolved within two to three days or within a couple weeks, it could take up to 30 days in other cases; if you’re asked to provide additional information regarding your dispute, that could extend the time frame further.
Whether your credit score changes and how much it changes depends on what you are disputing.
For example, if there was a late payment inaccurately listed on your credit reports, getting that removed is likely to cause a big improvement in your score. On the other hand, disputing a wrong address won’t affect your credit score in any way.
Add utility and phone payments to your credit report
Typically, payments such as utility and cellphone bills won’t be reported to the credit bureaus, unless you default on them. However, Experian offers a free online tool called Experian Boost, aimed at helping those with low credit scores or thin credit files build credit history. With it, you may be able to get credit for paying your utilities and phone bill — even your Netflix subscription — on time.
Note that using Experian Boost will improve your credit score generated from Experian data. However, if a lender is looking at your score generated from Equifax or TransUnion data, the additional sources of payment history won’t be taken into account.
There are also services that allow rent payments to be reported to one or more of the credit bureaus, but they may charge a fee. For example, RentReporters feeds your rental history to TransUnion and Equifax; however, there’s a $94.95 setup fee and a $9.95 monthly fee.
How much will this action impact your credit score? The average consumer saw their FICO Score 8 increase by 13 points using Experian Boost, according to Experian.
When it comes to getting your rent reported, some RentReporters customers have seen their credit scores improve by 35 to 50 points in as few as 10 days, according to the company.
The bottom line about building credit fast
When you’re working to fix your credit, it takes good behavior over time. However, lowering your utilization rate by paying down existing debt, getting a new credit card or requesting a credit line increase on an existing card can provide the quickest credit score boost.
Any late payments and debts sent to collection should be handled promptly — otherwise, they’ll just cause more pain once they hit your credit reports. It’s also wise to review your credit reports on a regular basis. in order to spot errors that might be dragging down your credit score.
Knowing what actions to take that can help improve your credit score and being a responsible borrower can boost your chances of increasing your credit score by 100 points or even more.