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If your credit score is lower than you'd like, there may be ways to bring it up. Depending on what's holding it down, you may be able to tack on as many as 100 points relatively quickly.
Scores in the "fair" and "bad" areas of the credit score ranges could see dramatic results — leading to more access to loans or credit cards, and at better terms. Here are some strategies to try:
1. Make frequent payments
If you are able to make small payments — often called micropayments — throughout the month, that can help keep your credit card balances down. Making multiple payments throughout the month works on a credit factor called credit utilization, which has a powerful effect on scores. If you're able to keep your utilization low instead of letting it build toward a payment due date, it should benefit your score right away. (You can track your credit utilization on each card and overall by viewing your credit profile with NerdWallet.)
2. Ask for higher credit limits
When your credit limit goes up and your balance stays the same, it instantly lowers your overall credit utilization. Call your card issuer and ask if you can get a higher limit without a “hard” credit inquiry, which can temporarily drop your score a few points. Some issuers may be willing to work with you during the COVID-19 crisis.
3. Dispute credit report errors
A mistake on one of your credit reports could be pulling down your score.
You're entitled to a free report every 12 months from each of the three major credit bureaus: Equifax, Experian and TransUnion. Use AnnualCreditReport.com to request those reports and then check them for mistakes, such as payments marked late when you paid on time or negative information that’s too old to be listed.
Then, dispute those errors to get them removed. The credit bureaus have 30 days to investigate and respond.
Ask a relative or friend with a long record of responsible credit card use and a high credit limit to add you to his or her card as an authorized user. The account holder doesn’t have to let you use the card — or even tell you the account number — for you to benefit.
This works best for people who have little recent credit experience, and the impact can be significant. It can fatten up your credit file, give you a longer credit history and lower your credit utilization.
5. Use a secured credit card
Another method to build credit from scratch is by using a secured credit card. This type of card is backed by a cash deposit; you pay it upfront and the deposit amount is usually the same as your credit limit. You use it like a normal credit card, and your on-time payments help your credit. Choose a secured card that reports your credit activity to all three credit bureaus.
6. Keep credit cards open
If you're racing to improve your credit profile, be aware that closing credit cards can make the job harder. Closing a credit card means you lose that card’s credit limit when your overall credit utilization is calculated, which can lead to a lower score. Keep the card open and use it occasionally so the issuer won’t close it.
7. Mix it up
If you have only credit cards or only loans, consider getting the type of credit you don’t have. Having both installment accounts (you have equal payments for a set time) and revolving credit (you choose how much to pay, as with credit cards) can boost your perceived creditworthiness.
8. Pay bills on time
No strategy to bump up your score will be effective if you pay late. Why? Payment history has the single biggest effect on credit scores, and late payments can stay on your credit reports for seven years.
If you miss a payment by 30 days or more, call the creditor immediately. Arrange to pay up if you can and ask if the creditor will consider no longer reporting the missed payment to the credit bureaus.
Even if the creditor won’t do that, it’s worth getting current on the account ASAP. Every month an account is marked delinquent hurts your score. Fortunately, the impact of a missed payment fades over time. Showing lots of positive credit behaviors after a misstep can help offset the damage more quickly.
Can you improve your credit by 100 points?
If you’re struggling with a low score, you’re better positioned to make gains than someone with a strong credit history.
Is a 100-point increase realistic? Rod Griffin, director of public education for Experian, says yes. “The lower a person’s score, the more likely they are to achieve a 100-point increase,” he says. “That’s simply because there is much more upside, and small changes can result in greater score increases.”
And if you’re starting from a higher score, you likely don’t need a full 100 points to make a big difference in the credit products you can get. Simply continuing to polish your credit can make life easier, giving you a better chance of qualifying for the best terms on loans or credit cards.