Follow these 3 steps to improve your credit score (2024)

Your credit score is important. It can determine whether you land your dream apartment, what cell phone plan you are eligible for and the interest rates you'll pay on loans.

That's because your credit score is considered a measurement of how likely you are to pay back the money you borrow from a lender. The better your score, the less risky it is to give you money. The worse your score, the less likely it appears that you will pay it back on time.

"Credit scores can predict with great accuracy the likelihood that a person will default on a loan," Rod Griffin, senior director of consumer education and advocacy at Experian, tells CNBC Make It. "It gives [lenders] a numeric representation of the risk associated with lending to you."

The average American has a credit score of 711, according to ValuePenguin, which qualifies as "good" under the FICO credit score breakdown. But if you're looking at your score and see room for improvement, here are three things you can do to start building back up your credit.

1. Pay your balance on time, every time

There's no quicker way to hurt your credit score than missing payments, which is why you should always make sure to pay your bill on time. Setting up autopay can be immensely helpful when you get a new credit card; it helps you demonstrate that you are a reliable borrower.

If you have a history of late payments, it will take more than one on-time payment to help rehabilitate your credit score. "Your score looks at behavior over time, not just what you did today," Griffin says. Make a habit of paying your bill on time and don't let yourself miss a payment.

While it's ideal to pay your balance in full if you're able, so that you can avoid accruing interest, paying the minimum will still show up as a completed payment on your credit report. It's better than missing a payment altogether.

And if you normally pay your bill on time but for some reason are a few days late on a payment, it's worth reaching out to your credit card issuer in advance to let them know and to ask if they could not report it to the credit bureaus.

2. Keep your balance low

In addition to making sure you always pay your credit card bills on time, keep an eye on how large your statement gets. In the eyes of lenders, using a high percentage of your line of credit — a figure known as a credit utilization rate — could be a sign that you're a risky borrower.

Generally, experts recommend having a credit utilization rate below 30%. That means that if you have three credit cards with combined lines of credit worth $10,000, you don't want to put more than $3,000 total on them each month.

"Lenders get nervous if your balance takes up too much of your available credit because the closer you get to maxing out, the more likely it may be a sign of financial difficulty for you," Matt Schulz, a credit card expert at LendingTree, tells CNBC Make It.

If a borrower with a high credit card balance runs into an unexpected life event, like a job loss or medical issue, it will be more difficult for them to repay the balance.

If you get a raise and start making more money, you should tell your card issuer because they may increase your line of credit, Schulz says, particularly if you reliably pay your statement on time. Having a higher line of credit will let you increase your spending without hurting your credit score.

3. Review your credit report for any mistakes

Your credit score is based on the information in your credit report. Schulz recommends reviewing your reports from all three major bureaus at least twice a year — once in the summer and once in the winter — to make sure there aren't any errors that are dragging down your score.

"People would be really surprised to know how many mistakes are on their credit report," he says, recommending that consumers keep an eye out for payments that may have been mistakenly marked as late.

These mistakes "can have a significant impact on your credit score," Schulz says, and fixing them can result in a 50-point bump in some cases.

"These errors aren't anything malicious, it's just human error and it's up to each individual to check their credit report every once in a while to make sure everything looks as it should," Schulz says.

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Follow these 3 steps to improve your credit score (2024)


Follow these 3 steps to improve your credit score? ›

You have the right to request one free copy of your credit report each year from each of the three major consumer reporting companies (Equifax, Experian and TransUnion) by visiting You may also be able to view free reports more frequently online.

What are 3 ways to build your credit score? ›

There is no secret formula to building a strong credit score, but there are some guidelines that can help.
  • Pay your loans on time, every time. ...
  • Don't get close to your credit limit. ...
  • A long credit history will help your score. ...
  • Only apply for credit that you need. ...
  • Fact-check your credit reports.
Sep 1, 2020

How can I raise my credit score 3 points? ›

What actions you can take to boost your credit scores?
  1. Review your credit reports for errors and dispute any inaccuracies. ...
  2. Keep paying your bills on time. ...
  3. Improve your credit mix. ...
  4. Improve credit utilization. ...
  5. Read more.

What are 3 ways to find out your credit score? ›

There are a few main ways to get your credit scores.
  • Check your credit card or other loan statement. Many major credit card companies and other lenders provide credit scores for their customers. ...
  • Talk to a nonprofit counselor. ...
  • Use a credit score service.
Oct 19, 2023

What are three steps that you can do to improve your FICO score fix your credit? ›

Steps to improve your FICO Score
  1. Check your credit report for errors. Carefully review your credit report from all three credit reporting agencies for any incorrect information. ...
  2. Pay bills on time. ...
  3. Reduce the amount of debt you owe.

How can I get my 3 credit scores? ›

You have the right to request one free copy of your credit report each year from each of the three major consumer reporting companies (Equifax, Experian and TransUnion) by visiting You may also be able to view free reports more frequently online.

What are 3 things you need a credit score for? ›

Financial institutions look at your credit report and credit score to decide if they will lend you money. They also use them to determine how much interest they will charge you to borrow money. If you have no credit history or a poor credit history, it could be harder for you to get a credit card, loan or mortgage.

What are 3 factors that go into your credit score? ›

What's in my FICO® Scores? FICO Scores are calculated using many different pieces of credit data in your credit report. This data is grouped into five categories: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%).

How to raise your credit score? ›

If you want to improve your score, there are some things you can do, including:
  1. Paying your loans on time.
  2. Not getting too close to your credit limit.
  3. Having a long credit history.
  4. Making sure your credit report doesn't have errors.
Nov 7, 2023

What are 3 ways you can hurt your credit score? ›

5 Things That May Hurt Your Credit Scores
  • Making a late payment.
  • Having a high debt to credit utilization ratio.
  • Applying for a lot of credit at once.
  • Closing a credit card account.
  • Stopping your credit-related activities for an extended period.

What are the 3 types of credit scores? ›

The score models can be divided into three major types: FICO, VantageScore and other credit scores.

What are 3 credit score companies? ›

By law, you can get a free credit report each year from the three credit reporting agencies (CRAs). These agencies include Equifax, Experian, and TransUnion.

What is a 3 digit credit score? ›

A credit score is a three-digit number that rates your creditworthiness. FICO scores range from 300 to 850. The higher the score, the more likely you are to get approved for loans and for better rates.

How credit score can be improved? ›

Maintain a healthy credit mix: It is better to have a right combination of secured loans (such as Home Loan, Auto Loan) and unsecured loans (such as Personal Loan, Credit Cards) of a long and short tenor to build a good credit score. Too many unsecured loans may be viewed negatively.

How to correct credit score? ›

Both the credit bureau and the business that supplied the information to a credit bureau have to correct information that's wrong or incomplete in your report. And they have to do it for free. To correct mistakes in your report, contact the credit bureau and the business that reported the inaccurate information.

What are at least 3 things not factored in your FICO score? ›

FICO® Scores consider a wide range of information on your credit report. However, they do not consider: Your race, color, religion, national origin, sex and marital status.

What are the 3 biggest components of a credit score? ›

Factors That Determine Credit Scores
  1. Payment History: 35% Making debt payments on time every month benefits your credit scores more than any other single factor—and just one payment made 30 days late can do significant harm to your scores. ...
  2. Amounts Owed: 30% ...
  3. Length of Credit History: 15% ...
  4. Credit Mix: 10% ...
  5. New Credit: 10%
Jul 29, 2023

What are the 5 factors that help you build credit score? ›

Five things that make up your credit score
  • Payment history – 35 percent of your FICO score. ...
  • The amount you owe – 30 percent of your credit score. ...
  • Length of your credit history – 15 percent of your credit score. ...
  • Mix of credit in use – 10 percent of your credit score. ...
  • New credit – 10 percent of your FICO score.

What builds up a credit score? ›

Paying your accounts on time and in full each month is a good way to show lenders you're a reliable borrower, and capable of handling credit responsibly. Old, well-managed accounts will usually improve your score - although be sure to read about the potential impact of unused credit cards.


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