4 Ways to Raise Your FICO® Score
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The FICO® Score is the most widely used credit score (used by 90% of top lenders). FICO® Scores range from 300 to 850. If your score is lower than you’d prefer, here are four things you can do to give it a boost.
1. Stop Late Payments
Payment history is the single largest contributor to your FICO® Score, making up 35% of your score. A history of late payments has a significant impact and may remain on your credit report for up to seven years. But good news: the older those late payments are, the less negative impact they tend to have. The time to start making payments on time (or even early!) is now.
Key actions
- Set up recurring reminders for payments at least a few days before the actual due date.
- Consider setting up automatic payments so you never miss a payment.
- Learn more about what you can do if making your payments feels difficult by going to this article.
2. Lower Your Credit Utilization Ratio
Your credit utilization ratio is the percentage of your available revolving credit (such as credit cards) that you regularly use. For example, if you have a credit card with a $1,000 limit and regularly borrow $500 on it, your credit utilization ratio is around 50%. A low credit utilization ratio shows lenders that you use credit responsibly, and the lower the better.
Key actions
- Take steps to lower the amount you regularly borrow on revolving credit. Use the Trim Your Budget Coach below to find places to cut.
- Look into increasing your credit limit. This allows you to spend the same amount while lowering your credit utilization ratio. Of course, raising your limit can also be dangerous if the temptation to spend more with a higher limit is too hard to ignore. Raising your limit requires you to submit a request to your lender. Note: raising your limit can sometimes slightly lower your FICO® Score for a short period of time.
- Avoid closing unused credit cards, as this can lower your credit utilization ratio by lowering the amount of revolving credit available to you. The major exception to this is credit cards with an annual fee, as you don’t want to be paying for a card that you aren’t using.
3. Review Your Credit Report
Your credit report is a record of your financial history from one of the three major credit bureaus—Experian, Equifax, and TransUnion—and it’s used to create your FICO® Score. It’s possible that your score could be negatively impacted by inaccurate information included in your report. Because of this, it’s wise to review your reports from all three bureaus at least once per year for mistakes or inaccuracies. Look for misreported late payments, accounts that don’t belong to you, incorrect loan balances, and anything else that doesn’t look quite right. If you find inaccuracies, dispute the error with the reporting bureau.
Checking your credit report and score is generally considered a soft inquiry, and soft inquiries don’t negatively impact your FICO® Score. A hard inquiry impacts your score, but this is only made when you request and give a lender permission to check your credit for a prospective loan, new credit card, or other purpose.
Key actions
- Go to AnnualCreditReport.com at least once per year to review your credit report. This is the only site authorized by federal law to provide free weekly reports.
- Dispute any incorrect information with the appropriate credit bureau.
- Sign up at myFICO.com/sabf and get your FICO Score straight from the people who created it. Plus, free Equifax credit monitoring and a free Equifax credit report every month.
4. Be Patient
When you’re looking to boost your score quickly, it’s tough to be patient. But 15% of your FICO® Score is determined by the length of your credit history. The longer your history of using credit and the longer your accounts are open, the better. Your score will likely go up in time without you doing anything. This is especially true if you make payments on time and keep your credit utilization ratio low.
Key actions
- Stay consistent in your credit usage and payments.
- Avoid rapidly opening new credit. New accounts lower your average account age, which can work against your goal of increasing your length of credit history. This is especially important if you don’t have a long or full credit history already.
Change Takes Time
There’s no instant way to raise a FICO® Score. Instead, these actions represent consistent lifestyle changes that gradually boost your score. Because of that, it can take months or even years to see significant gains—but that doesn’t mean that change isn’t coming! And while you make these changes, you’ll also benefit from improving your overall financial health.
Improving your FICO® Score requires patience, dedication, and purposeful actions. But, with consistency, you can improve your FICO® Score and build a great score that opens financial doors. To create a dedicated plan for improving your score, try the Repairing Credit Coach.
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