Boost your credit score fast

You've decided to increase your credit score, and that's a brilliant move. This decision shows you're serious about improving your financial situation. While it might seem like a tough task, you've got what it takes to make it happen. You're already on the right track by looking for ways to enhance your credit. This journey is more than just about numbers. It's a commitment to bettering your financial health.

Your credit score is yours to own, and yes, there are legitimate ways to put the pedal to the metal. An action-oriented mindset is going to be your biggest asset here. With the right moves, you could improve your credit score faster than you think. We'll show you how. 

Achieve is not a Credit Repair Organization and does not provide, or offer, services or advice to repair, modify, or improve your credit.

How quickly do credit scores change?

Credit scores can change the instant new information hits your file at one or more of the main credit bureaus: Equifax, Experian, or TransUnion. 

Here are some examples of score-changing events. Most have the potential to change your score quickly, but not always in the direction you want it to go.

• Make a payment (the only action on this list that usually doesn't have a fast-acting effect on your score)

• Miss a payment

• Charge a purchase

• Lower your credit card balance

• Apply for new credit

• Have a debt sent to collection

• Close an account with a balance

• Correct an error on your credit report

• File bankruptcy

• Go through a home foreclosure or have your vehicle repossessed

• Get a higher credit limit on your credit card account

• Open a new account

How quickly those changes are reflected on your credit report varies. For example, if you dispute an error on your credit report, the credit bureau could take 30 days—and in some cases, up to 45 days—to investigate. If the credit bureau finds an error, a correction could take another five business days. 

Payments to credit accounts may take around 30 days to hit your credit reports. Lenders typically report to credit bureaus just once a month, though some may report more frequently. While payment activity credits to your account in a few business days, it takes a little longer to see an update in your credit reports and scores.

Here's how to identify opportunities for quick score changes that might help your credit profile.

First: get your credit reports

Your credit reports offer insight into what helps or hurts your credit scores. There are several important reasons to check your credit regularly.

• Check for errors. Millions of people have errors on their credit reports, and some of those errors could impact your score. Unless you check your credit often, however, you may be unaware that your report is inaccurate.

• Monitor for fraud. Identity theft can be a real threat to your financial security, and it could cause serious damage to your credit. When you monitor your credit reports regularly, it's easier to spot potentially fraudulent activity that might suggest identity theft. 

• Look for opportunities to improve. Your credit reports could give you some clues about what you need to do to improve your credit scores. For example, if you notice that your balances are high relative to your credit limits, that's a sign that you may need to come up with a plan to pay them down. 

You can get a free online report from each credit bureau weekly at the federal government's site AnnualCreditReport.com. You can also obtain them for free directly from Equifax, Experian, and TransUnion. Many banks and credit card companies offer free credit scores and put them on your monthly statements. 

The two fastest ways to improve your credit score

You might already know that your payment history affects your credit score more than any other factor. The thing is, although delinquent payments could tank your score in a blink, a positive payment history is something you build over time. It's not a quick fix. If you want to bump up your score quickly, there are two ways to do it:

• Improve your credit utilization

• Fix credit report errors 

Both could have short- and long-term impacts on your credit. In the short term, you might see a few points added to your scores when you address these factors. In the long term, you’ll be in a better position to maintain a higher credit score when you manage credit utilization effectively and keep your report free of errors. 

Let’s learn more.

Ways to improve your credit utilization

Credit utilization, also called balance to limit, is the ratio of your total credit balances to your total credit limit. In other words, it's how much of your credit limit you use at any given time. Credit utilization only applies to unsecured revolving accounts like credit cards—not personal loans, mortgages, or auto financing. 

Credit utilization is captured in the moment. It's not something that needs to build over time, like payment history or the age of your accounts. Your credit score can change the instant your credit card balances are reported to the credit bureaus. That's why changing your credit utilization is one of the fastest ways to change your credit score.

Credit utilization example

Let's say you have a credit card with a $3,000 credit limit, and you owe $2,900. Your utilization on this account is nearly 97% ($2,900 / $3,000). Not good for your credit scores. Accounts that are maxed out or close to maxed out ding your score, sometimes significantly.

Now let's say you make a $2,500 payment. That would bring your utilization down to around 13%, and your credit score is likely to go up when your new balance is reported. (This is a simplified example that assumes no other significant changes are reported.)

Likewise, if the balance on your card is zero, you use it for purchases that use up a significant amount of your credit limit, and you don't pay off those charges before your new balance is reported, your score is virtually guaranteed to go down when the bureaus receive that new balance. How far? It depends on your utilization and other factors influencing your score.

Other ways to improve credit utilization

Paying down your credit card balances isn't the only way to improve your credit utilization. You could also: 

• Ask for a credit limit increase.t. Many credit card companies allow you to request a credit limit increase online and if approved, the change is instant. Your new credit limit will then be reported to the credit bureaus. The catch is to avoid new debt. If the above credit card has a $2,900 balance and a $5,000 limit, your utilization drops to 58%.

• Open a new credit card account. You could also open an entirely new credit card account to add to your overall credit limit. Even if your new card's limit is relatively low, that could help improve your credit utilization. Again, the trick is to leave your new credit limit alone and not use it. 

• Pay off your credit card balances with a consolidation loan. This doesn't reduce the amount you owe, but it'll lower your utilization ratio if you move the debt from credit cards to an installment loan. The catch is to avoid racking up new balances on those paid-off credit cards. 

What's a good credit utilization ratio? The short answer is the lower this number is, the better. According to Experian, people with good credit tend to maintain their credit utilization at around 35%; people with excellent credit have less than 10% utilization. 

Credit scores look at your utilization across all of your accounts and on each individual account. If you need your credit score to be at its best for a loan application, spread out your debt across your accounts, and pay your bill early after charging purchases (so a higher balance doesn't get reported on the statement closing date). 

Credit reporting errors that hold your score down

The Consumer Financial Protection Bureau says these are the most common credit reporting errors, and many could drop your credit scores:

• Errors in your identity information, such as the wrong name, phone number, or address

• Having accounts mixed up with someone with a similar name (a "mixed file")

• Fraudulent accounts from someone stealing your identity

• Inquiries for new credit that you didn't apply for

• Accounts with an incorrect status, like saying they are open when they are actually closed

• Being reported as the owner of an account when you are an authorized user (and therefore not responsible for payments)

• Accounts reported as late or delinquent when they aren't

• Incorrect dates for the last payment, date opened, or date of first delinquency

• Payments that you made but are not reported

• Incorrect information that reappears in your file after it was corrected

• Accounts appearing multiple times with different creditors listed, especially if they are delinquent or in collections

• Errors in the current balance or credit limit of your accounts

• Being mistakenly reported as deceased

When you get your credit reports—it's good to do this once or twice a year—look over the details. If you find errors, dispute them, even if they seem inconsequential. 

How to dispute credit report errors

Each of the three major credit bureaus allows you to submit a dispute online. You also have the option to dispute credit report errors over the phone or by mail, but online is the fastest method. 

Here's how to dispute an error:

• Visit the credit bureau's dispute page and register for a free account.

• Once registered, start a dispute and provide information about the error, including the account number, what you'd like to dispute, and why you think the information is incorrect.

• Upload any documentation you have to support your claim, such as receipts, bank statements, or debt resolution agreements.

• Submit your dispute.

Once you submit a dispute the credit bureau has up to 30 days to investigate. The credit bureau may reach out to you for additional information or documentation, which may push the window out to 45 days. 

The credit bureau will notify you in writing of the outcome of the investigation. If an error is found, the credit bureau must correct or remove it. That could add a few points to your credit score almost immediately. If the credit bureau doesn't find an error, your report won't change.  

Another quick boost for your credit score

If you don't have any credit accounts in your credit file and therefore have no score, there's another strategy you could use. You could apply for a credit builder loan (typically offered by credit unions).

Here's how credit builder loans typically work.

• You apply for a small loan, usually $500 to $5,000. 

• The lender deposits the loan proceeds into a secure account that earns interest. 

• You make payments each month until it's paid off.

• Once the loan is paid in full, the lender turns over the money in the secure account to you. 

You'll pay interest and possibly a lender fee. The lender reports the account as an installment loan. As long as you make your payments on time, a credit builder loan could have a positive impact on your credit score within six months.

Impact of rent payments on credit score

If you rent, you could get credit for on-time payments, which may help your credit scores. Rent-reporting services collect information about rental payments and pass it on to the credit bureaus. 

There are two ways to report rent payments:

• Do it yourself through a service like Self or Rental Kharma

• Ask your rental manager or property owner to report your payments

Rent payments that show up on your credit reports could be factored into your credit scores. If you plan to rent for a while, this is a simple way to see an improvement in your score even if you don't have credit accounts in your name. 

If your property manager reports rent payments, ask which service they use and whether you'll pay a fee for this benefit. Some rent reporters report to all three credit bureaus while others may only report to one, which could make a difference in how your scores add up. 

Credit building apps

Credit builder apps could help you build credit from your mobile device. Experian Boost, for example, lets you set up a free account and instantly raise your credit score for free when you pay everyday bills like:

• Utilities

• Cell phone service

• Streaming services like Netflix and Hulu

• Rent

• Insurance

You create your account and connect your bank accounts. Experian scans for bill payments to add to your Experian credit file. Once those payments are added, you could get a real-time boost to your credit scores. 

It's free to sign up and you don't need a credit card to get started. 

How credit card refinancing could affect your score

If you have some credit card debt, you could refinance it to improve your scores in the long run. You can combine credit card balances with a debt consolidation loan or use a balance transfer offer. 

Either way, you'd have one debt payment to make each month instead of several. And you may get a lower interest rate on a consolidation loan or balance transfer card. 

So what does it mean for your scores?

• In the short term, your score may drop slightly, since you'll have to apply for a new loan or credit card. Inquiries usually trim a few points off your credit scores. 

• In the long term, your scores could rise if you make your loan or balance transfer card payments on time each month. You could also get a score boost if the gap between what you owe and your credit limit widens as you pay down the balance.

Here's a pro tip to make this strategy work: Keep your credit card accounts open, but don't use them. You get the benefit of a higher credit utilization, and you don't add to your debt. 

How secured credit cards could help rebuild credit

A secured credit card is a credit card that usually requires a cash deposit to open. The credit card company holds your deposit and gives you a line of credit to use.

You can make purchases with your card, which shrinks your available credit. You free up available credit as you make payments toward the balance. 

A secured credit card is a good way to rebuild damaged credit for a few reasons.

• Credit limits are usually low, so you don't run the risk of racking up a big debt. 

• Secured credit cards are easier to qualify for when you have poor credit. 

• Account activity, which includes payments, gets reported to the credit bureaus. 

• Your credit card company may return your deposit and convert you to an unsecured account after you make a certain number of on-time payments. 

If you want to rebuild credit with a secured credit card, do your research. Check out how different cards measure up when it comes to deposit requirements, credit limits, fees, and other benefits, such as rewards programs. The best secured credit cards help you build credit at your own pace, with minimal fees. 

Playing the long game: 7 strategies for excellent credit

You can maintain excellent credit year after year by establishing good financial habits.

• Pay bills on time. Set up automatic payments or reminders to protect your credit.

• Apply for credit only when you need it. Most people naturally add a variety of credit accounts to their credit file over time, like a student loan, a credit card, a car loan, or a mortgage. Don't try to force it. Applying too often can hurt your score.

• Use a service to get your utility and rent payments reported to credit bureaus. This information is called alternative credit data, and it won't affect your FICO score. But it could show a creditor that you're creditworthy. Alternative credit data may also include information from your bank and your employer's payroll department that can help you gain points. You can add your utility and cell phone payments to your credit history for free using Experian Boost. You or your landlord will need to sign up (and pay) for a service if you want your rent payments reported.

• Become an authorized user on a friend or relative's account. Their payment history on that account is reported to your credit file, so only do this if they have excellent credit. 

• Avoid carrying credit card balances if you can. The best way to use credit cards is for rewards or convenience, but without carrying the balance and paying interest. If you have to put an expense on a credit card, prioritize paying it off as soon as possible. 

• Keep old accounts open. Credit plays a part in credit scoring so it helps to keep older accounts open, even if you don't use them regularly. You can make one small purchase every few months and pay it off to keep the account active. If the account charges an annual fee, consider asking your credit card company if they can downgrade you to a fee-free version of the same card.

• Use credit-builder apps. If you plan to use credit-builder apps, get to know the features so you can make the most of them. Review your account info regularly and make sure that any new credit accounts you open are linked to your account. 

Building and protecting good credit isn't a one-and-done exercise. It's a life-long process that will also improve your financial health. 

What’s next?

You're on the right track! Your next steps to a better credit score are:

• Order your credit reports from the credit bureaus' websites or annualcreditreport.com.

• Examine each report for errors and dispute them, no matter how small.

• Calculate your credit utilization ratio and decide how to lower it if you need to. 

If your credit history is limited or damaged, you can turn that around, starting now. Track your progress, and don't forget to celebrate your wins.