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Increase Your Credit Score

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Somewhere along the line, debt became “normal.” In fact, American consumer society has progressed to the point that access to debt is almost essential to living a middle-class life.

If owning a house is the modern American dream, most Americans wouldn’t be able to achieve this dream without the help of the finance industry. As a result, our finances — and our lifestyles — rely heavily on credit scores. Improving these scores not only opens the door to opportunities, but can also save us a lot of money in the end.

Why It Matters

A credit score determines the types of interest rates we receive on loans. Because of this, a good credit score could save tens to hundreds of thousands of dollars throughout someone’s life.

It is also required if we want great financial products like cash back rewards credit cards. These are excellent ways to earn money on the things we buy anyway and, if handled responsibly, will never cost us a penny in interest. However, you need good credit in order to access them.

Sure, it’s possible to live without ever using a financial service that requires a good credit score. A full cash-based life is not entirely out of the question. For most, though, it is simply unrealistic.

Because so many people need a good credit score to maintain the best financial condition, choices and actions that increase that credit score are incredibly important. Luckily, it’s not all that “hard” to do… it simply takes time and a concerted effort.

Let’s talk about a few of the first steps you should take when attempting to rebuild or improve your credit score.

Look for Mistakes

The fastest (and often, biggest) fix for improving your credit score is something most consumers have never done: simply correcting errors.

Credit scores are driven by credit reports, and credit reports are driven by the information that lenders and card issuers send them. More often than one might expect, lenders have incorrect information. Credit bureaus make mistakes, as well.

There is little excuse for not checking all three credit reports at least once a year. In fact, you’re entitled to one from each bureau — Experian, Equifax, and Transunion — every twelve months, free of charge. Be sure to obtain these and pick through them, paying attention to high balances, late payment marks, and other derogatory reports. If something doesn’t seem correct or match your records, give them a call.

Correcting a problem on a credit report can result in a credit score increase of from ten to a hundred points or more.

How to Do It

Once each year, visit to get your three free credit reports. Do me a favor, don’t Google “free credit report.” You’ll get a slew of solicitous results, many of which are scams or paid sites. is the only government-approved site for your yearly, complimentary reports.

Rather than getting all three at the same time, you can spread this out so that you check a different report every four months. However, if you’re looking for an immediate change and you haven’t looked in the past year, it doesn’t hurt to get it all done at once.

After you retrieve your credit reports and avoid the gratuitous up-selling, check every piece of data on each report for accuracy. Any problem with your personal data can be corrected easily. If there’s a negative item on your credit report that does not apply to you, you have a few options.

You can call the lender directly, especially if it’s an account that’s still open, and let them know that there is an error. Be ready to provide any sort of proof that you may have (statements, cleared checks, etc). If they are unable or unwilling to help, though, you will need to file a dispute with the reporting bureau.

Reporting an error on your credit with each bureau is a much more simplified process than it was just a few years ago. You can either send a letter through the mail or go online and open a dispute. Whether online or through snail mail, include any documentation you have to support your claim.

The credit bureau will then reach out to the creditor in question, and they’ll have thirty days to respond.

Lingering Reports

Some negative items are supposed to drop off your credit report after a certain number of years, automatically. Sometimes, though, the bureaus overlook this on individual credit reports until someone brings it to their attention. It pays to be vigilant in this situation.

Here are a few of the common reports that should fall off on their own. Be sure to check your report and confirm that your own negative items did indeed disappear as planned.

  • Old bankruptcies must be removed from your credit report after ten years.
  • Lawsuits and judgments must be removed after seven years, even if you haven’t fulfilled the court order.
  • Paid tax liens remain for seven years, and unpaid liens remain for fifteen.
  • If you are divorced and your spouse incurred debt when you weren’t married — either before you were married or after your divorce — it should not appear on your report.

If any of the above situations apply to you, and the time period for which the items need to remain on the report has passed, contact the bureau as soon as possible. If you’re correct, they will have the negative items removed.

The best part? Your credit scores should improve almost immediately.

Work On the Big Picture

Keep in mind there isn’t just one credit score. Each bureau has their own formulas and use their own data, and there are several varieties published by each bureau.

FICO8 and FICO9 are the most popular credit scores. When lenders, landlords, employers, and anyone else checking your credit researches your history, though, they could be looking at any one of several sets of information.

Differences in these histories can lead to different credit scores. You never really know which version they are going to pull, so it pays to work on your overall credit picture. While there are differences in scale and exact score formula, the same approaches to the use of money and credit can improve your score across all brands.

You can maintain a good credit score by developing a long history of responsible credit use, not using too much credit, and having a good mix of types of credit. Here are some specific tips:

  • Pay your bills on time. If you’re more than 30 days delinquent on any bill, it will negatively affect your score. Pay them on time, every time, and even consider using auto-pay so you never forget — this will also save you wasted money on late fees!
  • Keep credit card balances low. The ratio of debt to available credit affects your score; the higher the ratio, the higher your score. Keep this in mind if you consolidate multiple credit cards to fewer. This can result in the same level of debt but a lower level of available credit.
  • Don’t open unnecessary accounts. I know from personal experience that being at a sales counter in a store and being offered a 15% discount “just for applying” for a store credit card can be enticing. After all, 15% is a good discount! On the other hand, opening credit card accounts lowers your credit score, thanks to both hard inquiries and your average age of accounts.
  • Manage your credit cards responsibly. Use cards properly by paying off the balances quickly and taking care of installment loans. Doing this builds up credit history. Banks will see someone with a favorable credit history as less risk, compared to an individual with no history.
  • Closing an account doesn’t help. If you made mistakes in the past, they won’t go away from the credit report simply by closing the account. Some items can stay on the report (and be factored into your score) long after you’ve reformed your ways.
  • Keep your oldest credit history. The age of your credit history is an important factor in your score. So, even if you don’t like the terms on your oldest credit card, don’t cancel it. There’s no need to continue using the card, but keep it open. Some cards require you to use it ever-so-often or they’ll automatically close the account for you; be sure to ask about their own policies.

Be Patient

Improving your credit takes time. Aside from fixing errors, there is no “quick fix” to building a good score.

However, if you work hard at decreasing (or eliminating debt), avoiding excessive inquiries, and always paying bills on time, your score will slowly climb. The longer your accounts are open and in good standing, the higher your credit will rise. Your limits will likely increase, as well, which will further improve your score.

Before you know it, you’ll not only have great financial habits established, but a healthy credit score to match.

Updated October 16, 2017 and originally published April 5, 2011.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 24 comments… read them below or add one }

avatar 1 rewards

How long do positive items stay on one’s credit report? Items such as paying off student loans, car loans, mortgage, etc.?

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avatar 2 Luke Landes

Accounts in good standing stay on your credit report ten years after being paid off.

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avatar 3 Anonymous

Pay your bills on time, always. While your credit likely won’t be adversely affected until your account is sent to a creditor learning to pay off bills, in full and on time is a great habit to get into to ensure you have good bill payment habits. If possible automate this activity so you don’t even need to remember to pay the bills.

Keep old credit cards – especially your oldest. I didn’t do this when I got frustrated at the new PIN technology and bank policy so I cancelled my oldest (of 14 yrs – one I never used). I now wish I did not do this. While the credit from that card will remain on my credit history for 7 years it will eventually disappear – but at that time I lose the ability to show 21 years of great history on that card.

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avatar 4 Ceecee

Also in the past you have discussed the secured credit card, where a monetary balance is kept in an account to secure the credit card. It helps those with poor credit build their rating up.

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avatar 5 shellye

Everyone is entitled to one free credit report per year, per credit bureau. To keep tighter tabs on your report, you should request a credit report every four months from a different bureau, and keep them rotating. In other words, today request your report from Experian, four months from now, request one from Trans Union, then four months after that request one from Equifax, then start over four months later with Experian. That way, there’s less time that goes by before you notice an error.

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avatar 6 Luke Landes

That’s true if the error appears on all three reports, but most errors only appear on one report. In general, it’s a good idea to pull one credit report every four months — that’s what I do (or what I try to do).

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avatar 7 skylog

good call shelleye. this has been my strategy. while each report may have some “variations,” due to who and what reports, i feel it gives one a good overall year round picture of one’s situation.

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avatar 8 Anonymous has a neat feature called the Credit Report Card, which gives you an estimated range of your credit scores. The service is free, can be accessed any time, and is updated every 30 days. The last time I logged in to check mine, I noticed they had started something new, an identity theft risk assessment, that is also free.

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avatar 9 wylerassociate

besides obviously paying more than the miminum each month, I make it a point to only use my credit card for things I need, not what I want. I also use websites like and to manage my credit as well.

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avatar 10 Anonymous

And be careful about opening up too many credit cards, don’t make the mistake I made! Spread out credit card accounts, preferably 6 months in between each new account open. And don’t try to apply for four cards at the same time like I did! If you can, keeping unused credit cards open will be better than closing them. This decreases your available credit figure and decreases your debt to credit ratio.

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avatar 11 Anonymous

Jon, can you elaborate more on what happened to your score after opening multiple credit cards? I have excellent credit history and a high score (760), but about 2 months ago I opened up 2 new credit cards (Fidelity AMEX and PenFed) and closed 2 others because they had much better rewards/cash back deals.

But, I recently have been getting crazy sign up bonuses in the mail for additional cards ($250 sign up bonus from Chase Sapphire, 20k points from JetBlue) that I have a hard time turning down. I’m just worried that I’m completely thrashing my credit score by doing this. I just paid off my car and won’t be purchasing a house within the next 3 years or so, but still…

Also, does anyone have any idea how SOON I can cancel credit cards after signing up and obtaining the sign up bonus? Does it look bad if you cancel them within 6 months of opening?

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avatar 12 Anonymous


My recommendation is if you’re activating a card only to get the ‘sign up bonus,’ I wouldn’t sign up at all. There isn’t an exact time frame on when you should cancel the card to “look the best.” By opening the Amex and Penfed cards your score may have suffered briefly (I would guess around 24 pts) but that will adjust back to your usual score over a few months time.

@FLEXO: Awesome article! It’s amazing how much a credit score determines, and how little most consumers know about what goes into the score. Even outside of loans, it can decrease car insurance or waive a required security deposit for some utilities.

I’m glad you mentioned Annualcreditreport over Freecreditreport. Although the jingle is catchy, I wouldn’t pay the $14.95/month for the monitoring service.

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avatar 13 Anonymous

I recommend checking your credit report periodically. I have always had good credit, but 25 years ago I was denied a credit card. It was because of a mistake on my credit report. It took me 6 months to have it removed. These credit reporting companies are dealing with a lot of information and a mistake occurred. If I did not check, it would stayed on my report and affected my credit.

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avatar 14 Anonymous

Actually have credit history. And pay off credit cards on time.

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avatar 15 Anonymous

I think the store cards are the most insidious. They tempt people like me who want to save the most at purchase time. But they usually have the lowest limits, and highest rates-so when they are maxed they affect your credit score more.
We don’t do store cards at our house anymore.

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avatar 16 OrchidGirl

If you have a one time bill (like a medical bill) show up on your report in error, contact the place – not the collection’s agency it was sold to – to get it straightened out and removed from your credit report. I had a case where they sent the bill to a nonexistent address (they hybridized the mailing and billing addresses). When they realized the mistake was on their end, it was quickly settled and removed from my credit report.

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avatar 17 TakeitEZ

I went into default for one of my student loans last year but after making consistent payments I am no longer in default status. How long does my default stay on my credit record?

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avatar 18 Anonymous

I have had a credit card for 10 years and they recently imposed a $59 annual fee on it. Should I keep it open?

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avatar 19 Anonymous

@Amy – If there’s a 59$ annual fee, I’m hoping there’s a rewards program with the card. If so, see if you can spend in a way so that the rewards you redeem offset the cost of the card.

@ez – Credit reports show 24 months of payment history. Two years from the date you got “back on track” you should be blemish-free.

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avatar 20 Anonymous

They show more than 24 months. Transunion in 2010 shows up to 48 months. And, on one of the reports, I forgot which, (shredded already), it showed an 81 month history.

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avatar 21 Anonymous

I wasn’t too specific…some things show up on your credit report for 7 years and 10 years on some matters of law and forever on unpaid liens. The effect is minimized after 2 years. Your credit score is weighted heavily ( 70% ) on the past 2 years from today’s date. Everything older than 2 years has limited effect. This is why some credit repair people tell you not to pay collections and stuff if they are old.

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avatar 22 Anonymous

Yes, it’s a cash back card. I might just keep it open b/c I’ve had it so long and not really use it that much.

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avatar 23 TakeitEZ

@Pianist – Thanks for the info! I thought it would be much longer than that. Good to know!

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avatar 24 Anonymous

I am beginning to wonder about creditworthiness. After about 20 years- I kept credit card low after 5 years of overspending. I borrowed and paid 3 larger personal loans during that time, and all 3 credit scores are excellent.

After keeping myself dependable on the books and getting 3 reports this year I tried to get a small loan but was turned down.

My home was red-tagged as unsafe to live in which means having to borrow for repairs or to move. If I can not borrow for anything; a high credit score is beginning to look like a lot of hooeey to me.

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