10 Simple Ways to Boost Your Credit Score

Making on-time payments to credit cards and installment loans (such as personal or student loan debt ) is one of the quickest ways to boost your credit score. Paying down debt and disputing errors also help.

Credit utilization is one of the key elements in your score, so keeping credit card balances below 30% of total available credit helps boost it.

1. Review Your Credit Reports

Examining your credit reports helps you identify which factors are lowering or raising your scores, with payment history (35%), amounts owed (30% of available credit used; also known as utilization ratio), length of history (15%) and the mix between revolving credit accounts and installment loan accounts (10%) being the main contributors.

If you identify errors on your credit report, disputing them with the bureaus could help boost your score.

2. Pay Your Bills on Time

Paying your bills on time is one of the key ways you can increase your credit score. Set reminders in a digital calendar or budgeting app, and consider signing up for automatic payments through your bank.

Payment history accounts for 35% of your FICO score, and bringing any past-due credit cards or loans current quickly improves scores.

3. Pay Down Debt

Paying down debt can help improve credit utilization, which accounts for approximately 30 percent of a score. That could involve targeting cards with high balances or seeking assistance from a credit counselor to get back on track.

Newer credit-scoring models like FICO and VantageScore may take into account paid collections or charge-offs as positive factors, potentially improving one's score. But applying for loans could lower it due to hard inquiries that trigger hard inquiries into one's history.

4. Apply for a Credit-Builder Loan

Some lenders offer credit-builder loans to help borrowers with weak or thin credit build or rebuild their scores. These installment loans usually help build the payment history component of credit scores.

Credit bureaus take notice when lenders report on-time payments to all three bureaus, raising scores. When shopping around for loans, be mindful that interest rates and fees vary by lender; credit unions frequently offer such loans.

5. Pay Your Rent on Time

Renters might not realize it, but on-time payments to their landlords could significantly bolster their credit scores. Rent reporting services offer renters the chance to have their rental payment history reported directly to credit bureaus.

Even though this service may not be available to everyone, it can provide significant help to people with limited or no credit histories and help improve the length of those histories - a factor which greatly contributes to credit scores.

6. Make On-Time Payments to an Installment Loan

Credit utilization accounts for an important component of your score; it measures how much debt you owe compared to your available credit limit. Paying off installment loans may reduce credit utilization and thus give your score a modest bump.

If your finances consist solely of credit cards, diversifying with personal loans can help diversify and potentially boost your scores. Experian Boost allows you to add utility, cellphone and streaming service payments that wouldn't otherwise factor into your score into your credit report and give your score a boost.

7. Open New Accounts Only as Needed

Even though new credit accounts for 10% of a score, its importance pales in comparison with payment history and utilization. If you only have limited accounts or short credit histories, adding another card could help expand the mix of your accounts and help enhance the diversity of your portfolio.

Just be careful that any time you open a new account, only do so if necessary - otherwise opening one could lower your score as it lowers the average age of your accounts.

8. Don’t Apply for New Credit

Credit scoring agencies place heavy weight on payment history and credit utilization when assigning scores; opening new accounts could wreak havoc if bills are not paid on time.

Credit Mix is another factor, and having accounts from different types can be helpful for your score. But only open new cards if it will add value to your profile; otherwise it should be avoided altogether.

9. Don’t Close Old Accounts

Closing a credit card account can have an adverse impact on your score, since you are decreasing the total available credit and potentially raising your utilization ratio.

Closed accounts remain on your credit report for 10 years and can have an adverse impact on the length of history category of your score. Instead, consider asking for an increase in credit limits on accounts you use regularly instead.

10. Keep Your Credit Card Balances Low

Credit card balances play a vital role in your credit scores, so keeping utilization low is of utmost importance. But, should you need extra room to handle financial emergencies, Philp suggests asking the issuer of your card to increase its limit.

Reduce your utilization rate and boost your score at the same time by paying your balance off by the due date each month to avoid late fees and interest charges.

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