In this article:
- How Long Does It Take to Improve Your Credit Score?
- What Factors Affect Your Credit Score?
- How to Improve Your Credit Score
- Is There a Quick Fix for Repairing Credit?
- Boost Your Credit
If you monitor your credit scores, you may have noticed that they fluctuate on a regular basis. It's normal to see your credit scores rise or drop by a few points from one month to the next, but making a huge improvement in your scores won't happen overnight.
If you're looking to raise your score by a large number, know that your unique credit history makes it impossible to guarantee a certain increase over a set time period. Any promises to increase your score by a specific number should be viewed with caution.
However, you can take steps to improve your credit score by learning about the issues that are bringing it down and adopting new habits that can put you on a path to a higher score.
How Long Does It Take to Improve Your Credit Score?
You can always make improvements in your credit scores, but there's no guaranteed timeline for gaining a set number of points. Your timeline for improvement can be longer or shorter based on your credit habits, and how they work in combination with one another.
A substantial gain in points will require some time and patience, but the sooner you start implementing positive credit habits, the sooner you'll hit your goal. You can start building a higher credit score right away by reducing your credit card balances, managing your credit card and loan accounts responsibly, and monitoring your credit file.
It's also important to avoid adding negative items to your credit file. Filing bankruptcy, for instance, is one of the most impactful items to your credit reports, with the potential to cost you hundreds of points. Other severely damaging items on your credit report include collection accounts and vehicle repossession.
What Factors Affect Your Credit Score?
Understanding what goes into your credit scores can help you start gaining points faster and build up a strong credit file. Here are the main factors that go into calculating your scores:
- Payment history: Whether you pay your credit cards and loans on time accounts for 35% of your FICO® Score☉ , the score most often used by lenders.
- Credit balances: Credit utilization, or the percentage of your available credit that you're using, makes up 30% of your FICO® Score. Keeping your balances under 30% of total credit available is key to maintaining a solid credit score; for top scores, aim to keep your utilization in single digits.
- Length of credit history: The length of time you've had your credit accounts open makes up 15% of your FICO® Score. The longer you have your accounts open, the better.
- Applications for new credit: Applications for credit cards and loans can cost you a few points each, and they impact your scores for a year. New applications account for 10% of your FICO® Score.
How to Improve Your Credit Score
There are a handful of ways to gain points, but the best way to improve your credit scores is to practice good credit habits over time. Here are some of the best ways to gain points and and maintain a strong credit file:
- Pay every bill on time. Paying credit cards and loans on time is the biggest factor in improving your scores, and it shows creditors that you're a reliable borrower. Although non-debt bills don't typically impact your credit, falling behind on them can result in accounts going to collections, which has a severe negative impact on your scores.
- Keep your balances to a minimum. Paying down your credit card balances will reduce your credit utilization ratio, which could help improve your scores. Low balances also show creditors that you're not strapped for cash and you can manage your credit card spending.
- Limit your applications for new credit. When you make lots of applications for new credit, your scores can take a hit. Multiple applications signal to lenders that you might be in financial trouble and could be taking on lots of new debt. You can limit the damage of comparison shopping by making all of your applications for a single type of credit, such as a mortgage or a car loan, within a two-week time frame.
- Build long-term credit history. The longer you keep your credit accounts open, the more your scores will improve. But you can still have high scores even if you haven't been using credit for a long period of time, as long as you practice good credit habits. You can also try becoming an authorized user to help lengthen your credit history.
Another important habit to practice while working on your credit scores is to keep an eye on your credit file. Monitoring your credit report and score for free with Experian will help you identify areas for improvement. It can also help you quickly catch errors that could hurt your scores and undo all of your hard work.
Is There a Quick Fix for Repairing Credit?
If you have negative items on your credit file, you might be tempted to work with a credit repair company for a quick fix.
Credit repair companies offer to "help" by saying they can remove negative items from your credit reports. They do this by taking over communications with your creditors or reporting agencies, and filing disputes on your behalf. You typically pay around $50 to $100 a month for this service. If an item on your credit report is correct, it cannot be removed by a credit repair company or anyone else. And the damage credit repair companies could cause to your credit, by requiring you to stop paying your bills, is substantial.
The truth is that building great credit takes time. Correct information, even if it is negative, cannot be permanently removed from your reports until it's due to drop off, which generally takes seven to 10 years. During that time, the impact of negative information decreases and your scores can improve.
If you find incorrect information on your credit reports, the best solution is to file a dispute, which you can do for free, and it doesn't require any help from a third party.
Boost Your Credit
When you're working to improve your credit scores, the best approach is to practice healthy credit habits over the long haul. But if you're struggling to get approved for your first credit card or loan, it can feel like you're stuck in a catch-22, since you need credit to build credit.
One way to jump-start the process is by using Experian Boost®ø. This free service allows you to add non-debt payments to your credit file. If you have a history of on-time payments for your cellphone, utility bills or even your Netflix® account, you can use Experian Boost to add those payments to your Experian credit report and improve your credit scores instantly.
