How To Improve Your Credit Score

Source: myFICO. Cult of Money.

Know How Your Score Is Calculated

To improve your credit, start by knowing what goes into the score. Most US lenders use a FICO Score, which weighs the five factors in the table above, according to myFICO. VantageScore uses similar information with different weights.

Mortgages are changing too. Since Sept. 9, 2026, every approved lender can choose VantageScore 4.0 or Classic FICO for loans sold to Fannie Mae and Freddie Mac, according to the Federal Housing Finance Agency. FICO 10T is approved but not yet accepted, and lenders still pull reports from all three bureaus.

Improving your score can lower your borrowing costs and even your insurance rates in most US states. Our article on how your credit rating costs or saves you money shows the dollar difference, and our piece on getting the best car insurance rates covers the insurance side.

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Check Your Credit Reports For Free

Your score is only as accurate as the reports behind it. In the US, you can get free weekly credit reports from all three bureaus at AnnualCreditReport.com, a change the bureaus made permanent in 2023.

Look for accounts you don't recognize, late payments you made on time, and balances that are wrong. Dispute errors directly with the bureau that shows them. The Consumer Financial Protection Bureau explains how disputes work.

Free scores are widely available through banks, card issuers and apps such as Credit Karma, which shows VantageScore 3.0 from TransUnion and Equifax. Those are useful for tracking direction, though a lender may use a different model.

Outside the US:

Source: ICO, FCAC, Moneysmart. Cult of Money.

See the UK Information Commissioner's Office, Canada's Financial Consumer Agency and Australia's Moneysmart for how to order yours and how often.

Always Pay Your Bills On Time

Payment history is the biggest factor in your score, so on-time payments do the most to raise it. Late payments stay on US credit reports for up to seven years, but their effect fades as newer on-time payments build up.

Even if you can only cover the minimum, make sure it arrives by the due date. To avoid missed payments, set every credit account to pay at least the minimum automatically from checking. You can always send extra payments anytime.

A payment generally isn't reported late until it's 30 days past due. If you miss a due date by a few days, pay it right away and call the lender to ask whether a late fee can be waived.

Pay Down Your Card Balances

The second biggest factor is how much you owe compared with your available credit, called your credit utilization ratio. Divide your total card balances by your total limits. A $3,000 balance on a card with a $4,500 limit is 67% utilization.

FICO data shows people with the highest scores tend to use less than 10% of their available credit. Getting below 30% helps, and getting below 10% helps more. Alexa's personal rule is to stay under 15%.

Paying down balances can raise your score within a month or two, because utilization has no memory in most scoring models. Once the lower balance is reported, the score reflects it. Our article on paying off debt covers ways to get there faster.

Pay before the statement closing date, not just the due date, if you want the reported balance to be lower.

Don't Open New Accounts You Don't Need

Each application for new credit adds a hard inquiry, which can lower your score by a few points for up to a year. While you're working on your credit, avoid new accounts unless you need them.

Shopping for a mortgage, auto loan or student loan is treated differently. FICO counts multiple inquiries for the same type of loan within a short window, 14 to 45 days depending on the model, as one inquiry, according to myFICO. Older FICO versions use a 14-day window, the newest use 45 days, and FICO Scores ignore those inquiries for the first 30 days.

And don't run up more debt on the cards you already have. Focus on paying balances down.

Keep Old Accounts Open

The length of your credit history is 15% of your FICO Score, and your oldest accounts carry the most weight here. Closing an old card also removes its limit, which raises your utilization.

If an old card has an annual fee you don't want to pay, ask the issuer to switch it to a no-fee card instead of closing it.

Newer Factors: Medical Debt, BNPL And Student Loans

A few rules have changed in recent years:

• Medical debt. The three bureaus stopped reporting paid medical collections and medical collections under $500 in 2023. A federal rule that would have removed most medical debt from US credit reports was vacated by the US District Court for the Eastern District of Texas on July 11, 2025, according to the CFPB, so larger unpaid medical collections can still appear. Some states have their own limits.
• Buy now, pay later. Some BNPL lenders report loans to the credit bureaus and others don't, and lenders may use score versions that treat BNPL loans differently. Check a provider's terms before counting on BNPL to build credit, and pay on time either way, since a missed payment can still be reported.
• Student loans. The pandemic-era protections for US federal student loans have ended, so missed payments can show up on credit reports again, and the Education Department restarted collections on defaulted loans in May 2025.

Does Crypto Affect Your Credit Score?

Owning or trading crypto doesn't affect your credit score, because exchanges and wallets don't report to the credit bureaus. Crypto products that involve borrowing can.

• Crypto credit cards. Cards that pay rewards in crypto are regular credit cards, so applications, balances and payments are reported like any other card.
• Crypto-backed loans. Some lenders that let you borrow against your crypto don't run a credit check or report the loan to the bureaus, so check each lender's terms before assuming the loan will build or hurt your credit. A margin call can still force a sale of your crypto if prices fall.
• Mortgages. In June 2025, the FHFA ordered Fannie Mae and Freddie Mac to prepare to count crypto held on US-regulated exchanges as an asset when evaluating mortgage applications. That affects reserves, not your credit score.

Stay Consistent And Be Patient

Be skeptical of anyone promising to raise your score by 100 points in a month. Credit repair companies can't remove accurate negative information, and anything they can legally do, you can do yourself for free.

If you have a lot of debt, paying it down, avoiding new accounts and paying every bill on time will raise your score over time.

Update: What Has Changed Since This Was First Written

Editor's note, Nov. 1, 2026: Alexa wrote this in late 2016 as a New Year's goal piece. The basics she covered still drive credit scores, and we've updated the details.

• Free reports: weekly free reports from all three US bureaus replaced the old once-a-year limit.
• Free scores: free scores are now standard from many banks and card issuers, so you no longer need to buy one to track progress.
• New rules: medical debt, BNPL and student loan reporting have all changed, and we added a section on crypto and credit.

What To Watch Out For

• Credit repair scams. In the US, it's illegal for credit repair companies to charge before they perform services, according to the FTC.
• Closing your oldest card. It can lower your score by raising utilization and shortening your history.
• Cosigning. A cosigned loan shows up on your report, and the other borrower's missed payments become yours.
• Identity theft. Freeze your credit at each bureau for free when you're not applying for new credit.

FAQ

How Can I Raise My Credit Score Fast?

Pay down credit card balances so utilization drops below 30%, ideally below 10%, and make sure the lower balances are reported. Dispute any errors on your reports. Those two steps can show results within one or two billing cycles.

How Long Does It Take To Improve A Credit Score?

Lower card balances can help within a month or two. Recovering from late payments or collections takes longer, often a year or more of on-time payments.

What Credit Utilization Is Best?

Below 30% is a common target, and people with the highest scores tend to use less than 10%. Paying balances before the statement date keeps the reported figure low.

Does Checking My Own Credit Lower My Score?

No. Checking your own reports or scores is a soft inquiry and doesn't affect your score. Only applications for new credit create hard inquiries.

Can Crypto Help Build Credit?

Holding crypto doesn't build credit. A crypto rewards credit card can, because it reports to the credit bureaus like any other card, as long as you pay on time and keep the balance low.