You could add up to 100 points with tips like paying cards more than once a month and disputing credit report errors.
STEP 1: Pay bills on Time
No strategy to improve your credit will be effective if you pay late. Why? Payment history is the single biggest factor that affects credit scores, and late payments can stay on your credit reports for 7½ years.
If you miss a payment by 30 days or more, call the creditor immediately. Arrange to pay up if you can and ask if the creditor will consider no longer reporting the missed payment to the credit bureaus.
Even if the creditor won’t do that, it’s worth getting current on the account ASAP. Every month an account is marked delinquent hurts your score. Fortunately, the impact of a missed payment fades over time. Showing lots of positive credit behaviors after a misstep can help offset the damage more quickly and eventually improve your credit.
If you’re simply not able to pay everything on time, know how to prioritize your bills. Look into financial assistance offered in response to the coronavirus pandemic.
STEP 2: Make Frequent Payments
f you are able to make small payments — often called micropayments — throughout the month, that can help keep your credit card balances down and improve your credit. Making multiple payments throughout the month moves the needle on a credit score factor called credit utilization. After payment history, this is another factor that highly influences your score.
STEP 3: Ask for Higher Credit Limits
When your credit limit goes up and your balance stays the same, it instantly lowers your overall credit utilization, which can improve your credit. Call your card issuer and ask if you can get a higher limit without a “hard” credit inquiry, which can temporarily drop your score a few points. If your income has gone up or you’ve added more years of positive credit experience, you have a decent shot at getting a higher limit. Some issuers may also be willing to work with you during the COVID-19 crisis.
STEP 4: Dispute credit report errors
A mistake on one of your credit reports could be pulling down your score. Fixing it can help you quickly improve your credit.
You’re currently entitled to a free report every week from each of the three major credit bureaus: Equifax, Experian and TransUnion. Use AnnualCreditReport.com to request those reports and then check them for mistakes, such as payments marked late when you paid on time or negative information that’s too old to be listed anymore.
Once you’ve identified them, dispute those errors to get them removed. The credit bureaus have 30 days to investigate and respond. Some companies offer to dispute errors and quickly improve your credit, but proceed with caution before you choose this option.
STEP 5: Become an authorized user
If you have a relative or friend with a long record of responsible credit card use and a high credit limit, consider asking if you can be added on one of those accounts as an authorized user. The account holder doesn’t have to let you use the card — or even tell you the account number — for your credit to improve.
STEP 6: Use a secured credit card
Building credit from scratch or improve your credit is by using a secured credit card.
This type of card is backed by a cash deposit; you pay it upfront and the deposit amount is usually the same as your credit limit. You use it like a normal credit card, and your on-time payments help your credit. Choose a secured card that reports your credit activity to all three credit bureaus. You may also consider looking into alternative credit cards that don’t require a security deposit.
STEP 6: Keep credit cards open
Closing a credit card means you lose that card’s credit limit when your overall credit utilization is calculated, which can lead to a lower score. Keep the card open and use it occasionally so the issuer won’t close it.
STEP 6: Mix it up
If you have only credit cards or only loans, consider getting the type of credit you don’t have to improve your credit mix. Having both installment accounts and revolving credit, such as loans and credit cards, can boost your perceived creditworthiness.