How to Improve Your Credit Score? 30 Smart Tips That Really Work!

How is your credit rating? If you have been through some tough times, then you did what you had to do to get by. You probably didn’t give your credit much consideration. Now, you find yourself wanting to repair and boost your credit so that you can buy a car, home, or have financial freedom. A bad credit score can haunt you for years to come. Credit issues are serious because they affect almost every part of your life.

Without good credit, you will be unable to get the things you need. You will pay more for loans, car and home insurance, and utility and rental deposits. Unfortunately, bad credit can even affect your ability to get a job. Unless you are loaded with cash, you need good credit. Even if you are a millennial that is trying to get away from using credit, at some point you will need a home or car. Here are 30 ways that you can boost your credit score and improve your overall standing.

We have put together a list 30 strategies to increase your credit score. Most likely, you haven't seen some of them anywhere else. We've got the details of each strategy in this guide, but if you are more of a visual person, check this infographic below.

30 Strategies to increase your FICO score

1) Lower Your Credit Utilization

One of the best ways to improve your credit score is to maintain a low credit card utilization ratio. The utilization ratio is the percentage of the credit limit you are using. For example, if your credit limit is $5,000 on a credit card, and you charge $1000 on that card, your utilization is 25% of your available credit.

The goal is to keep your utilization ratio below 30%. If you charge high amounts to your card and take a long time to pay them off, the credit scoring system considers you a risky consumer. By keeping your balance low and paying it off quickly, you send a message that you are a responsible person and the credit bureaus will reward you with a better score. Ideally, if you bring down your card utilization below 20%, you can boost your score even higher.

2) Increase Your Credit Limit

We have already covered the benefits of a low card utilization ratio. Another way that you can decrease your utilization ratio is by increasing your credit limits. If you made your payments on time and avoided negative marks on your reports for over 6 months, the card issuers may increase your limit automatically.

You can also ask for a credit limit increase after six months or a year of good standing. All you've got to do is pick up the phone and talk to a representative. Mention your good standing or increase in income, if that applies. Chances are they will ask you what credit limit you would like to have. Suggest an amount higher than you really want. It's always better to have a higher credit limit as it brings your utilization ratio down and helps your score. However, if you cannot control yourself with the higher limit, stick to something that you can manage. Impulse spending will get you into trouble.

If you get a credit limit increase, don't increase your spending. The whole idea is to have a lower utilization ratio, not to spend more. If your limit increase request gets rejected, try to find out why. You need to take actions to correct any possible issues. A credit limit increase is a great way to boost your score, so don't hesitate to ask for more money after building a solid payment history.

3) Pay Your Accounts On-time

This may sound like a no-brainer, but it's worth mentioning that paying your accounts on time is the best sign of creditworthiness around. Even a single missed payment will leave a delinquency mark on your report that will haunt you for months or years. In addition to negative points, late payments incur late fees. Do you really want to pay more than you need too?

In the digital age, you have many tools at your disposal to prevent late payments. You can set up alerts with your credit card companies to email or text you a few days before your due date. Relying on paper statements can be risky as they may get lost in a pile of incoming mail.

If you have been paying your bills on time but missed one little payment, the credit card company may give you the benefit of the doubt and delay reporting you to credit agencies for 30 days. Even if they report you and you do make the payment later, you can still talk to the credit company to take back the delinquent mark from your credit report. You can appeal based on your past timely payments.

The best is to set up a reminder system or automatic payment schedule, so you won't miss a payment. Don't rely on the credit card company’s grace periods. As they say, “an ounce of prevention is better than a pound of cure.” Stay on top of your payment schedules and you can prevent score dips. Nothing looks worse to a lender than a person with “slow pays” on their credit.

4) Pay Twice a Month

Using the reporting date instead of the due date is a great strategy to tip the credit rating system in your favor. But if you don't want to bother about keeping track of the reporting dates for every credit card you use, you can make payments twice a month. So instead of waiting until the due date to make the full payment, pay part of it halfway through the period. That way, no matter when the reporting date is, the amount reported to credit agencies is lower than the actual card usage.

5) The Reporting Date Trick

This is a cool trick that will make credit bureaus think your card usage is lower than what it really is. The best way to explain this is with an example. Let's say your credit card balance is due on the 20th of the month, but the credit card company reports your balance to credit bureaus on the 15th of every month. Instead of paying your balance due by the 20th, pay it by the 15th. That way, the company reports a smaller balance to credit bureaus. So, by paying a few days early, you make your card utilization look much smaller to credit bureaus. You can find out the reporting date by talking to a representative. When it comes to payments, think reporting dates, not due dates.

6) Transfer Balance Across Cards

A smart way to bring down your utilization ratio on one card is to transfer some of its balance to another card. For example, if one card has 40 percent utilization and another card has only 10 percent, you can transfer part of the balance from the first card. This will help to keep your utilization in both cards below 30 percent. Many credit card balance transfers are free. So that's a good way to lower your utilization per card. Be sure to check if there are any fees involved or if the credit card company does hard credit inquiries for such transfers.

7) Pay off the Charge-offs

You’re probably wondering why you should pay for a bill that has been charged off? Well, if the charge off is more than two years old, then there is no reason to pay it off. It won’t improve your score. But, if it has been under two years, then you can improve your score by paying it off. Do you understand what a charge off is? If you don’t pay your balance on an account for 6 months or longer, the creditor may declare a charge-off for that account. Charge-offs, basically, means that the creditor has given up on collecting from you. Charge-offs can hurt your credit score.

Go through your credit reports and identify all charge-offs within the last 2 years. Pay off all the charge-offs starting from the higher amounts down. You can then ask the creditors to report the change or even remove the charge-offs altogether. Once negative charge-off marks are removed, you should see a noticeable jump in your credit score.

8) Strike a Deal with Your Lenders

So, you got into a tough financial situation, and your account landed in collections. It's not the end of the world. You can still work out a deal with your creditor. You can put your negotiation skills to work and have your creditor make changes to your report in return for your full payment.

You can convince them to mark the records as "Paid in full" or even completely remove the negative record when you pay what you owe. Whatever you and the company agree upon, ensure that is in writing. This is one of those cases in life that handshake won't do. Do not make the full payment unless you have it writing that they honor the arrangement.

9) Piggy back on someone else’s Good Credit

If you have family members with a great credit score, you can ask them to add you as an authorized user on one of their credit card accounts. That way that account shows up on your report too, and you will get a boost in your credit score. You are not legally responsible for the debts on that account, but you will benefit from its history.

Even though you are not legally responsible for the account, you must know that you are affected by the account’s standing, good or bad. If the primary account holder misses a payment or over utilizes the account, that will be reflected on your report as your activity too. Ensure that the primary card holder is a responsible individual.

Authorized users are different from joint account holders. Unlike an authorized user, a joint account holder is responsible for the account’s debt along with the primary holder. To become an authorized user, you need the primary holder’s consent and a written letter to the creditor. You must specify the percentage of the credit limit that you will use and whether or not you are responsible for the payments. Piggybacking works great.

10) Rapidly Rescore Your Credit Report

If you are shopping for a mortgage or refinancing your home loan, you can take advantage of something called Rapid Re-Scoring. This is a neat service that can improve your credit score in less than 72 hours. Rapid Re-Scoring is a service only offered by mortgage brokers. This speedy strategy fixes inaccurate or outdated information from your credit reports in a matter of days.

There's a small fee for this service, but considering the impact on your credit score and mortgage payments, it's a no-brainer. If you can reduce your mortgage rate by 0.5 percent, that will save you tens of thousands of dollars over the life of the loan. You can access this service only through a lender or mortgage broker. Consumers cannot apply for this service directly.

11) Negotiate a Lower Interest Rate

To boost your credit score, your primary focus is usually on lowering your credit utilization ratio. So, most people think getting a better interest rate does not help their credit score. But when you lower your interest rate, you can pay off more of your balance and faster, for the same amount of payment. That means you can lower your credit utilization ratio indirectly. So, when you are on the phone with the credit card company representative, don't be shy to ask for a lower APR. Sometimes, "Ask and you shall receive" is quite a possibility.

12) Get a Gas Card

Retail cards, such as the ones offered at gas stations, are a great way to build a positive credit history. Consumers with low credit scores can still get approved for gas cards. The great thing about these cards is that they report your activities to the credit bureaus.

You may even get a small discount for using these cards for gas purchases. You must get gas frequently anyway. Why not boost your credit score and save some money along the way, while filling up your tank?

Some gas station companies, such as Citgo or Exxon, co-brand their cards with major card networks, like Visa and MasterCard. You can use these cards everywhere. Before you apply for a gas card, you may want to ask if there's an annual fee. Also, double-check that the card issuer reports your activities to credit bureaus. Try to pay your gas card balance in full every month, because gas cards usually carry a higher interest rate.

13) Get a Secured Credit Card

Getting a secured credit card is an easy way to give your FICO score a boost. The concept is simple; you deposit a certain amount of money, and they issue a credit card to you with the same amount as the credit limit. Basically, the bank uses your deposit as a collateral.

You must maintain a low card utilization of less than 10 percent on your secured card, and make full payments every month. This strategy will build a good credit history for you with little effort. Depending on your history, your credit score may improve within six to 18 months. Consumers, who previously had no credit score, have seen improvement in as early as six months.

14) Use Rent to Boost Your Credit Score

Your rent is a large chunk of money, and you should pay it every month, on time. So, why not use this responsible behavior to boost your credit score? Credit agencies consider monthly rent payments a financially responsible act. They reward timely payments with an increase in your credit score. So, you must ensure your rental payments get reported to the credit agencies.

Ask your property management company if they report your rent payments to the credit bureaus. If not, you can enroll in rent payment services that work with credit agencies. That way, you can pay your rent electronically, and all your timely payments will show up on your credit reports. Here's a list of a few companies to explore for this service:

15) Get a Credit Builder Loan

Whether you have good, bad, or no credit, this is a cool strategy that can help. Many small financial institutions offer what is called the "Credit Builder" or "Fresh Start" loan. This helps people to build their credit. Credit Unions, or Community banks, usually offer such loans. Here's how it works.

The bank lends you some money, but you cannot use that money. They deposit it in a savings account under your name. You make monthly payments for the loan. Once you make all your payments, then they will let you access the money in the savings account. The great thing about it is that they report your payments to the credit agencies, so your credit score improves.

The amount of the loan can be as low as $500. So, as long as you have an income, managing this loan is easy. You must know that the Credit Union reports your activities to the credit reports, even if you miss a payment, so make sure you make all your payments on time. The whole purpose of a Credit Builder loan is to improve your FICO score. Respect the loan terms and this loan will help your credit rating.

16) Get a Loan from Your 401K

You can take out a loan from your 401K retirement account to pay down your credit card balances, and this will bring your credit utilization below 30 percent. The great thing about getting a loan from your own retirement account is that it’s not reported to credit bureaus. Instead of paying high-interest rates to a credit company, you pay interest to yourself. You must know that you have to pay the retirement plan loans within five years, and the loan payments will come out of your monthly income.

17) Add Missing Accounts To Your Report

Creditors are not required to report any account information to the credit bureaus. When they do report your account information, they may report only to one or two credit agencies, not all three. Take a good look at your credit reports and make sure your accounts are all showing on all three of your credit reports. If you suspect that an account is missing from a credit report, contact the creditor, and ask them if they send your account information to that credit agency.

When looking for missing accounts, be aware that some accounts may show up on the report under a different name. Sometimes the name of the bank that finances the account may show on the report instead of the company name that you see on your credit card. It sounds confusing, but be advised that something like this is not an error.

18) Don't Close Unused Credit Card Accounts

It's tempting to close unused credit card accounts to simplify your life. But you should never do that. Closing unused accounts removes their history. That sets back the clock in your credit building efforts and hurts your FICO score. Leave those accounts open. Sometimes, credit card company close unused credit card accounts due to inactivity. That doesn't hurt your credit score. If you want to keep them open, you can always use them to make a small purchase every six to 12 months to prevent the issuer from closing the account.

19) Dispute Errors in Your Credit Report

There may be errors or incomplete information on your credit reports that is hurting your score. You may not even be aware of these errors. The only way to find out is to get a copy of your credit report and audit it. The good news is that you can get your credit report from all three bureaus once in every 12 months for free. Instead of getting the reports from Experian, Equifax, and TransUnion separately, you can get them all through Once you get your reports, sift through them carefully. For example, check for:

  • Wrong name
  • Inaccurate addresses
  • Incorrect or out of date marital status
  • Missing accounts

We have a comprehensive guide to help you with your credit repair that goes through this topic in more depth. Fixing obvious errors in your reports is an easy way to get rid of obstacles, and improve your score.

20) Consult with a Credit Repair Expert

If you need help with auditing your credit reports, filing disputes, following-up, and dealing with creditors, there are professionals who can help you. They do this for a living, so they know the laws. Just pass on the legwork to the experts and let them take care of it.

When looking for a credit repair company, be careful not to fall for scammers. There are people out there that promise great results but deliver nothing. We have made a list of trusted experts in credit repair. These are the best companies that have passed our ranking system. They are:

21) Add an Explanation Next to Negative Marks

So, you gave it your best shot to remove negative marks and failed. You still have one last arrow in your quiver. According to the law, you have the right to add a statement to your credit report to explain your negative marks. Anyone who requests your report will get to see your explanation next to the derogatory information. The statement should be brief and direct. Try to limit it to 100 words. Longer explanations get cut off or edited when the reports are sent electronically. You want to make sure that potential lenders, and others viewing your reports, are getting the full story.

22) Write a Goodwill Adjustment Letter

You missed a few payments, and negative marks found their way into your credit reports. Everyone deserves a second chance. Those who work for credit companies are human and can relate to you. Sometimes writing a well-crafted goodwill letter to your creditor is all you need to remove negative marks from your report.

Don't write the letter hastily as you want, to be honest and sincere. Make the point that you ran into financial hardships and this is not your on-going approach to your financial obligations. Be brief and genuine in your appeal. You can see a sample letter here. The sample can give you an idea, but don't copy samples word-for-word. The writing should be yours. If the creditor removes the offensive marks, you will see a sudden jump in your score, and it will be time well spent.

23) Never Remove Your Good Ol’ Debt

Some people think having any kind of debt record on your report is a bad thing. Nothing could be further from the truth. An old debt that you paid in full is a shining example of financial responsibility. You should never remove it from your credit reports. Go through your credit reports to ensure your old debts that you managed responsibly to stay on your records. The longer the history, the better it is for your credit score.

24) Avoid Hard Hits

A hard hit, or hard inquiry, occurs when a creditor or lender requests your credit report in order to approve or deny a loan, mortgage, or credit card application. Hard inquiries affect your score negatively. Hard inquiries, typically happen when you:

  • Apply For An Auto, Mortgage, or Personal Loan
  • Apply for rental appartment
  • Get cable or other utilities
  • Apply for a job
  • get an insurance quote
  • Apply for a credit card

A Soft hit, or soft inquiry, happens when a credit company requests your report for promotional purposes. Think of those pre-approved credit card offers. Soft inquiries don’t affect your credit score. Additionally, every time you pull your credit to check your FICO or report, it also affects your score.

25) Negotiate Annual Fees instead of Closing Accounts

We already covered that closing credit accounts will hurt your FICO score. But if your credit card charges annual fees, you may be tempted to close their accounts to avoid these dues. You can negotiate away your annual fee instead of closing your account.

Get on the phone with a representative and politely ask for alternative options. Credit card companies can usually change your account type to one that doesn’t have an annual fee. They may offer an annual fee waiver if you charge a certain amount to the card within a specified time period. They can be very creative. The bottom line is that don’t rush into closing an account to avoid the fees. That may save you a little money right away, but it’ll cost you a decrease in your credit score, which will cost more money in the long run.

26) Don't Apply For New Stuff

As your credit score improves, you start becoming a target for more promotional offers. Marketing departments will be hard at work to lure you into applying for new loans or credit cards with attractive benefits. Applying for credit cards, or loans will cause hard hits on your credit report and your credit score will suffer.

Some people think having more credit will bring down their utilization ratio. So, they start applying for new credit cards. To bring your utilization ratio to a good range, you must increase the credit limit on your existing cards instead of going on an application spree, which only hurts your FICO score. Don’t apply for credit unless you absolutely need it.

27) Shop for Loans in Clusters

Credit inquiries, for mortgages and car loans, are hard inquiries. So, they can hurt your credit score. Credit scoring systems treat a cluster of inquiries that are made in a short period of time as a single inquiry. Line up all your loan applications in a 2-week period to minimize the negative impact on your credit report. Keep all the loans the same in amount and type, so they come across as the same loan in the credit scoring system.

28) Report a Card Stolen or Lost

You can boost your credit score by duplicating the history for an account with good standing. When you report a card lost or stolen, the credit company closes the account and opens a new one. The new account inherits its history from the old account. That creates two different histories. Assuming that account had a good standing, your credit report now shows two different accounts with a good history. This will improve improves your credit score.

You must know that more sophisticated credit card companies may separate accounts from credit card numbers. So, when you report a card lost or stolen, they may not close the account. Rather, they may simply change the credit card number. Nonetheless, a lot of people believe that this technique works and can boost your credit score.

29) Use Technology To Your Advantage

Do you have a large pile of bills, long list of due dates, scheduling payments, and other financial obligations that make financial management a tiring chore? If you miss just one of your payments, then the chances are it will affect your credit report. The good news is that today’s technology can take care of most of these tasks for you. The most important thing is to make sure your payments are paid by the due date. Most banks and credit card companies have alert services that notify you of activities in your accounts.

You can set up alerts to notify you a few days in advance that a payment is due. You can also automate the payments to be deducted from your bank account. So, you won’t have to worry about missing payments. Most of these alerts can be set up simply by logging in to your bank or credit account online. The alerts can be sent through text message or email.

If you want to have a tighter control over your finances and nip any possibility of a fraud in the bud, you can set up the alerts to text you immediately. Every time your credit card or debit card is used, you will receive a notification. We receive many texts every day for socializing and fun. Having few extra text messages every day is a small price to pay for great financial management.

30) Use a Monitoring Service

If you really feel like a financial management enthusiast by now, you may want to go ahead and monitor your credit report proactively. Instead of checking your credit report once in every few months, you can sign up for credit monitoring services that notify you immediately every time there’s a negative mark or a hard hit on your report. These monitoring services usually cost a small monthly fee, but considering the financial consequences of negative marks, many consider them priceless.

For example, TransUnion offers a monitoring service that not only notifies you about any inquiries or negative marks but also offers monthly credit reports from all nationwide bureaus at no extra charge. The most useful feature they offer is the ability to lock your credit report at will. Once you lock your credit report, no one can access it, so even if your personal information is compromised, the fraudsters cannot open a new account under your name or social security number. Of course, you will have to temporarily unlock your report, if you apply for a loan, mortgage, or a credit card.

The Key To Boosting Your Score

As you can see from the list above, there are many things that you can do to boost your score. However, nothing will be as helpful as paying your payments on time and making wise financial decisions. Having good credit is not a destination, rather, it is a journey that you will be on for life. One small bill can move your score up or down. The key is to keep your score on an even platform so that you can have everything you ever need in life.