Four Steps You Can Take Today to Raise Their Score Almost Overnight

Raising your credit score can seem like a daunting task, but it's a crucial aspect of financial health. A higher credit score not only makes it easier to get approved for loans and credit cards but also qualifies you for better interest rates, which can save you thousands of dollars over time. Whether you’re starting with a low score or just want to improve your existing credit, here are three practical steps you can take to raise your credit score.

1. Pay Your Bills on Time

The single most important factor in determining your credit score is your payment history, accounting for 35% of your FICO score. Late payments can severely damage your credit score, so it's crucial to pay all your bills on time. This includes not just credit card bills and loans, but also rent, utilities, and any other recurring payments.

To ensure timely payments:

• Set up automatic payments for at least the minimum amount due on loans and credit cards.

• Use calendar reminders to alert you of upcoming due dates.

• Contact lenders immediately if you foresee difficulty in making a payment; many are willing to work with you to set up a payment plan.

Even if you have had late payments in the past, you can still improve your score by establishing a pattern of timely payments going forward. Positive recent payment history can significantly impact your score over time.

2. Lower Your Credit Utilization Ratio

Your credit utilization ratio — the amount of revolving credit you're using compared to your credit limits — accounts for about 30% of your FICO score. A high utilization rate can signal to lenders that you’re overextended and may have trouble making payments.

To improve your credit utilization ratio:

• Keep balances low on credit cards and other revolving credit.

• Pay off debt rather than moving it around, as consolidating credit can still result in high overall utilization.

• Ask for higher credit limits but avoid spending more. This can lower your utilization ratio since you have more credit available but the same amount of debt.

• Don’t close unused credit cards as long as they don’t cost you money in annual fees. Closing an account reduces your available credit and can increase your utilization ratio.

Aim for a utilization rate of 30% or lower; the lower, the better for your credit score.

3. Diversify Your Credit Mix and Build Credit History

Your credit mix — different types of credit accounts such as credit cards, installment loans, mortgage loans — and the length of your credit history collectively account for about 25% of your FICO score. Lenders like to see a mix of different types of credit because it indicates that you can manage various types of borrowing responsibly.

To diversify and build your credit history:

• Consider different types of credit. If all you have is credit card debt, you might want to consider a small installment loan (like an auto or personal loan). But only do this if it makes financial sense and you can afford the payments.

• Keep old accounts open. The length of your credit history is calculated based on the age of your oldest account and the average age of all your accounts. Keep old accounts open and active to extend your credit history.

• Become an authorized user on someone else’s credit card. If they have a good payment history and low utilization, this can help boost your score.

Building a good credit score doesn’t happen overnight. It requires consistent, responsible financial behavior over time. By following these three steps, you can not only raise your credit score but also maintain it:

• Monitor your credit regularly to understand how your actions affect your score and to catch any errors or fraudulent activities early on.

• Be patient and consistent. Improving your credit score is a marathon, not a sprint. Keep up your good habits, and you’ll see improvement over time.

• Educate yourself about credit. Understanding how credit works and what factors affect your credit score can help you make better financial decisions.

Finally, connect with Fortress today. We have a variety of strategies and methods than can dramatically speed up this process, sometimes by months and even years. Our experienced counselors have seen it all and can help you start the process of raising your credit score today.