How to Increase a Credit Score Quickly

Your credit score is a number between 300 and 850 that quantifies the person's creditworthiness and indicates how good your credit history is. In the US, three credit reporting bureaus, Experian, Equifax and TransUnion, collect personal and business credit-related activities, as well as prepare credit reports and calculate credit scores. Your credit score is heavily affected by two factors: your payment history and your amount of debt, especially on revolving credit card accounts.

Instructions

1

Pay your credit card bills and loan installments on time. It is pivotal for a fast increase of your credit score.

2

For each revolving credit card account, calculate the credit line utilization as the ratio between an outstanding balance and the credit limit. For instance, if the credit limit is $6,000 and the balance is $3,500, then the credit line utilization is 100 x 3,500/$6,000 = 58.3 percent.

3

Repay your debt, trying to bring down the credit line utilization to 30 percent or below for each credit card. For example, you have $2,000 to repay the debt on two credit cards with account balances of $1,500 and $3,500, and the respective credit lines of $6,000 and $4,500. According to Step 2, the balance-to-credit line ratio is 25 and 77.8 percent, respectively, for those credit cards. Thus, it is better to make a $2,000 payment toward the second credit card.

4

Keep your monthly balance on a credit card well below the available credit line (aiming for 30 percent or less of the credit line utilization), even if you always pay off your outstanding balance in full. An ability to pay credit card bills in full gives the false sense of security about your credit history. For example, imagine you spent $1,200 out of $1,500 of the maximum available credit during a billing cycle, and then paid the balance completely. It's assumable that such a scenario is positive, but what is reported to the credit bureaus is the monthly balance of $1,200 with the credit limit of $1,500, that translates into 80 percent of the credit line utilization.

5

Avoid debt consolidation on one credit card account. The consolidation likely will significantly increase the balance-to-credit limit ratio and negatively influence the credit score.

6

Avoid closing credit card accounts with a zero balance. The total credit utilization, defined as the ratio of your total amount in debt and the credit line for all accounts, is another factor that determines your credit score. Accounts with a zero balance decrease that ratio and increase the credit score.

7

Stay away from opening new credit card accounts, as it inevitably decreases the credit score.