7 Smart Ways to Improve Your Low Credit Score Fast and Easy

by | Last Updated: April 24, 2021

So you’re looking for jobs that pay $1000 a day, right?

Is your credit score ruining your life?

If you came here looking to fix your credit then the answer is probably yes.

But don’t feel bad. You’re not the only one who has credit issues. Most people are either clueless about credit or have scores that are on life support.

In fact, studies have shown that a surprising number of Americans are suffering from bad credit. While that can attributed to poor financial literacy, a bigger issue is voluntary ignorance.

People could care less to spend time thinking about their credit worthiness. They just prefer to ignore it.

You see, the topic of credit is usually an afterthought until it’s time to get a credit card, take out a loan, buy a house, rent an apartment, lease a car, or make a significant purchase.

Once someone fails to qualify for any of those things, that’s when they start scrambling to find solutions to their bad credit.

The thing is though, credit scores don’t magically change overnight. They take time. It’s called credit history for a reason.

It may not seem fair, but your scores are what companies and businesses judge you on. Your employer, bank, insurance agency, car dealer, etc, all want to know about your potential reliability.

So yes, your low credit score can ruin your life.

But the good news is, you can change it.

By implementing a few smart strategies, you can build a strong credit history and improve your credit score.

This post will show you how to improve your low credit score. But before you learn the strategies, you first need to understand…

How Credit Scores are Calculated

It’s easy to get a lot of bad information when you’re looking to raise your credit score.

Most people you talk to will just repeat things they’ve heard, which is as reliable as asking a psychic how to beat the stock market.

The reality is, there are five important factors that influence your credit score. These are:

1. Your Credit Applications

New loans and credit card applications make up 10% of your credit score. If you’re constantly applying for all those “pre-qualified” offers in the mail, you’re hurting your credit score. Even new loan applications can affect you.

They may be soft credit hits that vanish in a year, but those hits add up and push your credit score down. By frequently applying for new lines of credit, you create the image that you’re struggling financially and in dire need money.

2. Your Credit Diversity

Managing multiple forms of debt is 10% of your credit score. It’s not a big number but it’s still important. You are much more attractive to a lender if you’ve got more than just a bunch of credit cards.

Having an auto loan, business, and mortgage loan demonstrates your ability to manage credit. Even if you paid off your student loans in the past, that is also a factor in determining your credit worthiness.

3. Your Credit History

This accounts for 15% of your credit score. It’s one of the things companies and businesses look at to assess your risk to them. They look at how old your account is and frequency of use.

If they see that you’ve used credit for a while, it’s a sign of consistency. Your history of repaying borrowed money shows them that you’re disciplined enough to continue doing so in the future.

4. Your Debt Levels

This makes up 30% of your credit score. You might think this means owing money to multiple creditors, but it doesn’t. It has more to do with your debt-to-income ratio. What that means is…

…if your credit and loan amounts surpass your income levels, you become a liability. And the chances of you defaulting on a loan or missing a credit card payment are high. So if your debt levels are astronomical, you probably won’t qualify for anything – not even a free lollipop.

5. Your Payment History

Unsurprisingly payments are a whopping 35% of your credit score. It might seem similar to your credit history but it’s not. Your payment history is all about how responsible you are with borrowed money.

If you payoff your loans and credit cards on time, your credit score increases. But if your payments are late, outstanding, or you just don’t give a damn, well… your credit score drops. It’s as simple as that.

As you can see, there are just five factors that can influence your credit score. They are what lenders use to make decisions about whether or not to give you credit, and at what rates.

What’s a Good Credit Score?

The most popular scores used by lenders are FICO Scores. These credit scores often range from 300 to 850.

According to one of the top three credit bureaus, 66% of Americans have scores between 600 and 750.

Scores above 700 are generally considered good. If your score is above 800 you’re a rockstar and will receive amazing offers and rates. But if you’re closer to 300, you won’t even get a free hug.

The following table gives you a breakdown of FICO Scores:

Credit
Score
Rating% of
Pop.
Effects
300-579Tragic17%You probably won’t get approved for any kind of credit, and may have to pay a fee or deposit to get it.
580-669So-So20.2%Lenders will see you as high risk and therefore hit you with high interest rates on loans, etc.
670-739Cool21.5%There’s only an 8% chance that you’ll do dumb stuff to ruin your score, so lenders will give you decent rates.
740-799Great18.2%You’re attractive and responsible, lenders will swipe right and offer you very good rates.
800-850Rockstar19.9%Lenders will fight each other, sell their kids, and break out the fine china to offer you amazing rates.

Table showing FICO Score Ranges (Source: Experian)

Now that you know how credit scores are determined and what a good credit score is, it’s time to focus on raising your low credit score. So keep reading to learn…

How to Improve Credit Score Fast and Easy

If you’re hoping to find a quick fix on this list, you’ll be disappointed. There are no overnight solutions to credit repair. This stuff takes time. It’s like replanting a tree after you’ve destroyed the forest.

The good news is, these strategies will help you develop and implement the good habits you need to gradually improve your credit score.

1. Get rid of debt by snowballing

This should be your number one priority. Yes, even before pulling your credit score.

If you’ve got credit issues your score probably sucks any way.

Seriously, debt is – without question – the biggest problem that most people have.

Why?

Because in order to pay off your debt you need to do a deep analysis of your current financial habits. This could mean cutting expenses for certain luxuries or suppressing your desire to spend.

Yes, money is also a factor and you need it. But it’s secondary to habits. You can always make money by doing a side hustle. If you really need money fast, click here for a list of money making ideas that work.

Paying off debt can be overwhelming if you’ve got multiple balances. Trying to focus on all at once can give you a headache. The total might even give you anxiety. But what you need to do is attack it with a plan.

Let’s say you’ve got outstanding balances of $350, $90, and $1,060. Your first thought may be: “I need $1,500 to get rid of it.” That’s fine except you don’t have $1,500 right now. So what you should do is focus on the smaller number ($90) and make that your first priority. Then can move onto the $350 and finally the largest amount.

This is what’s known as snowballing. And using this strategy can quickly improve your credit score.

BTW, the credit authorities recommend keeping your credit card utilization rate under 30%.

So if the $1,060 is the balance on a card with a $2,000 limit, that’s a 53% utilization rate. Not good.

But if you drop it to $600 and continue to pay it off completely, it will have a positive impact on your credit score.

If you suck at managing money or need help making a budget, don’t worry. There are easy ways to create a budget or you can just use an app. Both will help you get rid of your credit card debt fast and ultimately raise your credit score.

2. Get a free credit report to know your credit score

Listen up… checking your credit report doesn’t actually affect your credit score.

Then what’s the point of including it here?

That’s an excellent question grasshopper. And here’s the answer…

Knowing your credit score gives you a starting point. Without it you’d have no idea where you rank on the credit rating scale. And if you don’t know where you rank, you can’t figure out where you need to be.

If you already know your score, the chart below can show you where you rank.

Fico Scores Improve Credit Score Chart

Chart Showing FICO Score Ranges (Source: Experian)

Furthermore, the information contained in the credit report is immensely valuable. You can see the data about yourself that lenders use to evaluate your credit worthiness.

It’s powerful stuff that you can use to make decisions that will correct past errors, repair your credit, and ultimately improve your credit score.

For instance… let’s say you paid off a loan months ago. If the lender failed to report it or made a mistake it can hurt your credit score. And if you don’t monitor your credit then you’d have no idea the problem existed and would therefore not be able to resolve it.

Believe it or not, situations like this do happen more often than you think. That’s why it’s important for you to know the information that lenders are reporting about you to the main credit bureaus – Equifax, Experian, and TransUnion.

By law you’re entitled to a free credit report yearly. Here’s how to get your free report:

  • You can dial 1-877-322-8228 or visit AnnualCreditReport.com to get your free credit report every 12 months. The is a service authorized by the U.S. government to issue free credit reports. Or…
  • You can use a service like Credit Karma to not only check your score but to monitor it. You’ll be notified immediately of any errors or dings against your credit score.

Either option is fine. Just remember that your credit is your responsibility.

It’s up to you to monitor it, check for errors, and try to resolve any disputes. Those free credit report options are just services, not babysitters.

3. Skip new loan applications and offers

If you’ve already got credit cards with balances that need to paid off, you don’t need another one. So any amazing offers you receive in the mail, just shred them. Don’t even entertain them until you have $0 balances.

Excessively applying for new credit cards in a short time frame can tank your credit score. Lenders see it as alarming behavior from someone who is struggling financially.

Opening multiple lines of credit yearly also stunts your credit history’s growth. You need to give it time to age.

Remember, every time you apply for a new type of loan, your score dips a bit. And it usually lasts a couple months.

Oddly enough, there are some situations where it’s okay to apply for multiple loans. Providing you spread them out of course.

Pro-Tip: Avoid harming your score by doing your own credit report requests instead of having a lender or banker do it.

If you’re thinking of buying a new home, car, or applying for a student loan (gasp!), you often need to shop around to compare rates. Doing this is totally fine. You can apply for a bunch of these loans in a month and it only registers as one inquiry.

When you do take out a single loan, it will count against your credit score once but it won’t tank it. However, taking out multiple loans will land you in a pile of poo.

In the event that you do need to get a significant loan, you shouldn’t make any new credit applications for at least six months prior. This prevents your credit score from fluctuating in the short term, which can affect the type of rate you get.

For instance… let’s say you’ve got a very good credit score of 745. If an inquiry drops your score by 10 points, you’ll fall into the good range.

That’s not really bad but it could affect the type of rate you get on your loan. And that definitely matters.

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4. Make timely payments

Every time you make a late payment or miss a payment completely you’re killing your credit score. This type of irresponsible behavior stays on your credit report like white on rice.

But even though you can’t strip those errors from your credit history, you can cover them up.

How? By taking control of your credit and making consistent monthly payments towards the balance.

Don’t just strive to make the minimum payments. Aim higher with the goal of paying off your debt as soon as possible.

Eventually, this trend will cover up your past mistakes and raise your credit score.

Now if you’ve got the memory of goldfish or don’t trust yourself to be diligent, you need to fix that. The best way to do it would be to use technology. You can use an app or set up reminders in your phone, email or digital calendar. Most banks also have payment reminder features so you can consider that too.

Speaking of banks, most also allow you to set up automated payments that go out on the payment due dates. And since it’s free, then it’s probably something you may want to take advantage of.

And if all else fails or technology scares you, just use a journal, a paper calendar, or sticky notes.

You already know how much timely payments affect your credit score. So you can use it to your to increase your score or avoid it and ruin your credit. The choice is yours.

5. Avoid closing aged accounts

Unless your credit card charges you a fee for non-use or even an annual fee, closing it may not be such a good idea.

After completely paying off debt, a part of you wants to scream and shut the account ASAP. But if you take it off your record, you’re removing a part of your credit history.

You see, even though you may not be using a credit card or loan, it still counts towards our history. It shows that you’ve had credit for a lengthy period of time and thus helps your score.

There’s also a difference between having a paid off student loan and a paid off credit card balance.

If you’re smart, it’s unlikely that you’d ever deal with student loans again. Plus you can’t really use what isn’t there.

However, you can always use a credit card that has been paid off as long as the account is still active.

Now obviously if you’re a credit card hoarder and had like six of them, you should close out a few of them. Just keep the one you’ve had the longest (or the one with the most perks) and ditch the rest.

In terms of perks, you’ve got to know which credit card fits your lifestyle.

For instance… if you’re a frequent flyer, a credit card with air miles is probably best for you.

So you don’t have to avoid credit cards completely. Once you pay off your debt, use the credit card to rack up the incentives but be sure to pay it off.

Whenever you want to pay for something and are planning to use the cash you have, charge the payment to your credit card instead. This is a great strategy for keeping your credit history alive and growing your credit score.

6. Negotiate with creditors

Remember that hottie in high school you wanted to date but didn’t because you thought you weren’t cool enough?

Well the reason you couldn’t date that person is because you never asked them.

Like so many things in life, most people just assume answers to their own questions. But in reality, those questions go unanswered because they never direct them to the intended audience. So people essentially give themselves false information.

What does this have to do with your credit?

A lot. So keep reading…

You see, if you somehow managed to rack up so much debt it scares the grim reaper, there’s still hope for you.

In certain extreme cases, creditors may be willing to negotiate with you on the pay off amount. This gives you a chance – albeit a slim one – of dramatically reducing your debt.

Now you may be wondering why Mr. Creditor is so generous…

Well it’s because he doesn’t want you to file bankruptcy. If you do that he gets zero money from you. So it’s in his best interest to work with you.

Yes, you can just file for bankruptcy and tell Mr. Creditor to pound sand, but that’s a Monopoly Chance Card you want to keep for a very, very, rainy day.

Besides, you can’t run from alimony payments, student loans, or unpaid taxes. And if you file for bankruptcy it will become difficult for you to borrow money in the future.

So, in short, if your debts are overwhelmingly high, just talk to your creditor and ask to have it lowered. After all… what’s the best that can happen?

7. Talk to a credit counselor

Sometimes there are battles that you just can’t fight alone.

If you’re living paycheck to paycheck, stalked by debt collectors, struggling to make a budget or even save for retirement, then a credit counselor may be able to save you.

Some people prefer to work with a counselor because it gives them comfort and peace of mind knowing there’s someone in the trenches with them.

Credit counselors can help you manage your debt by developing a personalized plan to address your financial problems. They can even negotiate with creditors on your behalf.

These counselors are certified and trained in consumer credit, budgeting, as well as money and debt management.

The best counselors are non-profit and provide services at local offices, universities online, or via the phone.

Unfortunately, not all counselors are good. Some may try to charge you or get you to pay for services that are usually free. All this does is leave you buried in more debt.

You also have to be wary of people who might scam you. Being in financial purgatory makes you an easy target for scammers (more on this below).

Anyway, if you’re looking for a credit counselor, consider choosing one from the Depart of Justice’s List of Approved Credit Counseling Agencies.

And remember… working with a counselor won’t miraculously change your credit score. Implementing and adhering to the strategy they give you will.

As for the topic of scammers…

Some Things Are Too Good To Be True

When you’re desperate for something, there’s no shortage of individuals willing to take advantage of you.

These cockroaches come out of the woodwork in droves.

Using television, radio, and online ads, they make all sorts of promises to prey on your situation. You’ll hear things like:

  • We’ll help you increase your credit score in 24 hours
  • Increase your credit score to 800 in just 30 days
  • Boost your credit score overnight
  • Change your credit score in one week
  • Get 780 credit in 7 days

All of those promises are as real as a fat man flying around in a sled pulled by eight magical reindeer.

Note: There are no quick fixes or secret solutions to repairing your credit. Anyone that wants you to pre-pay for credit repair services, offers you a new identity, or refuses to provide written documentation, is running a scam.

You can fix your credit problems on your own for free. And if necessary, you can get a government authorized credit counselor who is trained and certified on credit management.

The Bottom Line About Your Credit Score

Having a poor credit score ruin your life isn’t cool. After all, you might actually be a genuinely good person.

However, a bad credit score isn’t about your personality…

It’s a result of your own actions. So you have to accept responsibility for that.

You don’t need to let the score harm you though. By following this list of smart tips, you can dramatically improve your credit score.

Look… despite the stigma around it, personal finance isn’t that bad. As long as you’re willing to make some adjustments to your lifestyle and be a little more disciplined with your finances, you can avoid financial ruin.

Isn’t protecting your financial future worth it?

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About Carlton F.

Most people like to brag about themselves here. Carlton just wants you to know that he co-founded this website to help you find meaningful solutions to your money problems. Cars and traveling are his passion, but otherwise, he’s a humble dude.