How to Improve Your Credit Score, A Step by Step Guide for 2017

By Naomi Mannino, Rachel Morey, David Rodeck and Kimberly Rotter

A higher credit score means lower mortgage interest rates, better credit card offers and better insurance rates. Increasing your credit score fast is possible.

How to improve your credit score in 3 steps

Not all credit problems are the same because the reasons for a low score vary depending on your personal credit history factors, your current financial situation and your money management style. No matter what the reason, there are three basic steps to create your own personalized plan to improve your credit score.

1. Learn about things that negatively impact your credit score

Your credit score is based on five keys factors and they hold the solution to improving your credit. If you can get these five things right, your score will go up naturally and easily over time.

  • Payment history is the most important credit factor because it shows whether you pay your debts on time, every time
  • Credit utilization describes the amount of credit you’ve used in relation to your total credit limit
  • Credit age shows how long you’ve maintained your credit accounts and older is better than younger
  • Credit mix is the variety of credit accounts you have. More than one type shows you can manage a range of credit products.
  • Inquiries show how often you apply for credit and what types

Find out your credit score for free today on Credit Sesame.

2. Check to see exactly which credit factors are causing your low credit score

When you check your free annual credit reports (available at you will begin to see what is causing your credit score to be low. When you compare them with your free credit report card on Credit Sesame, you will learn what you need to do to improve your credit score.  Our service is 100% free, and there’s no hidden charge. Rest assured, you never have to input a credit card number or your full Social Security Number, and all data you provide is safely encrypted.

3. Follow the steps in this guide to fix your issues

Read through this guide and see which actions will work for your particular credit and financial situation and get started improving your credit score as quickly as possible.

These things negatively impact your credit score every time

Not all credit problems are the same. Late payments, collections, bankruptcy, a large number of credit inquiries, a high credit card utilization rate and even credit report mistakes all have a negative effect on your score.

The Worst Things that can Happen to Your Credit Score
Let an account go delinquent
Max out a credit card
Pick up a negative public record (foreclosure, bankruptcy, judgment, lien, wage garnishment)
Become the victim of identity theft

The first step is to diagnose the reason for your less-than-perfect credit score.

Learn More: Perfect Credit Score

Sign up for a free membership on Credit Sesame and review your free credit report card. You’ll see a letter grade assigned to each factor that affects your credit. Anything less than an A has room for improvement.

Below are the 5 most important credit score factors and how they impact your credit score.


Now ask yourself the following questions and keep track of the “yes” responses:

Do you make late payments on your credit accounts?

The most important factor in your credit score is your payment history. Late payments quickly and negatively affect your credit score. Every monthly payment helps your score but just one missed payment can wreck all your progress. If you miss a due date, make the payment as soon as possible because lenders typically wait until a payment is 30 days late before reporting it.

Are your credit cards maxed out?

Your credit utilization ratio counts nearly as much as your payment history. Credit utilization is the amount of credit card debt versus your total outstanding credit limit. If all your cards are maxed out you have very high credit utilization (also called amounts owed).  For example, if you have $3,000 of debt and a $4,000 combined credit limit, your utilization ratio is 75%.

Utilization versus credit score range

Bring your balances down to improve your score. The lower your ratio, the better the boost to your score (people with the best credit scores use no more than 7% of their available credit).

Check your utilization on Credit Sesame today.

Credit utilization is calculated for each card and overall. Even one maxed out card can hurt your score.

Credit Sesame users who have scores 800 or higher barely have any credit card debt: The average credit card limit among users who have the highest score (839) is a generous $12,898, yet the average balance is a mere $54. That’s a credit utilization ratio of 0.42%.

Learn More: Best Way to Build Credit

Do you close your old accounts or have only very new accounts?

The third factor is the average age of your credit accounts. Over time, you will gain points in this category and that’s one reason why you shouldn’t close old accounts or those you have paid off.

Do you only use one type of credit?

The next factor is credit mix. The credit bureaus like to see that you can handle a variety of credit products. For example, student loans, mortgages and auto loans are all installment loans since the balance is fixed, but a credit card or home equity line of credit are revolving credit.

Do you often apply for new credit products?

Each inquiry into your credit, or credit application, can cause your score to drop by a few points. Soft inquiries, including employer checks, self-checks and inquiries made for the purpose of prequalifying you for promotional offers do not hurt your score. Hard inquiries, however, are those made as the result of an application for new credit. Those are the inquiries to limit.

For each “yes” response, that is one of your personal credit factors that could be causing your low credit score.

Your credit score is important. Find out what it is today for free.

5 ways to fix your low credit score

There are many ways to improve your credit, some faster than others and some easier than others. Check out our quick-start chart, below, to see which positive credit behaviors you might use to get the biggest impact to your credit score for the least amount of effort.

Positive Credit BehaviorsImpactEffortTime for improvement
Pay off medical collectionLow/MediumHigh, budget permittingPossibly no impact
Leave old accounts openLowLow, adds age to your credit fileSteadily
Change payment due dateMediumLow, allows for your personal cash flowSteadily
Debt consolidation loanMedium/HighHigh, results in new credit to handle responsiblySteadily
Become an authorized userMedium/HighLow, family member-permitting1-2 months
Check free annual credit report for errorsPotentially highLow, easy to fix errorsSteadily
Get free Credit Sesame Report CardPotentially highLow, shows you where to startSteadily
Monitor credit score monthly on Credit SesamePotentially highLow, monitor for errors and improvementSteadily
Make lump sum paymentHighHigh, budget permitting1-2 months
Get a secured credit cardHighLow, build payment history over timeSteadily
Dispute errors on credit reportHighLow, can improve score fast1-2 months
Sign up for automatic paymentsHighMedium - budget permittingSteadily
Request a credit limit increase, existing accountHighLow, only if good credit already1-2 months
Apply for new credit card to raise credit limitHighLow, only if good credit already1-2 months
Pay off newest non-medical collectionHighHigh, budget permittingPossibly 1-2 months
Pay-for-delete agreement with collection agencyNot dependableHigh, negotiating with agencies can work, but not always1-2 months, if removed

Now read the expanded explanations to create your personalized strategy to improve your credit score:

  1. Check your free annual credit reports for mistakes

Correct errors to improve your credit quickly and easily. Many errors are inconsequential (such as a misspelled address), but others can hurt your score. For example, your credit report could mistakenly show that you never paid off an old car loan when, in fact, you did. It can also show you that you’ve been a victim of identity theft if someone else opened accounts in your name that you did not.

If there is an easy way to improve your credit score, it’s error correction on your credit reports. The Federal Trade Commission (FTC) estimates that as many as one in five consumers have an error on one or more of their three major credit reports, and many of those errors are serious enough to affect credit score. Depending on the type of error, asking the credit bureaus to correct them could have an immediate positive effect on your score.

Learn More: What is a Good Credit Score

Take a close look at all three of your credit reports. They are available for free, once every twelve months, at When you access your free credit reports, you won’t see your credit score, but you will see your credit history.

If you find an error on your credit report, take the matter up with the credit reporting agency. Disputing an error on your credit report is a simple process, and each of the three major credit bureaus offers instructions when you view your report.

Look for errors like a report of a late payment that’s more than seven years old, accounts that don’t belong to you, paid-off accounts showing as unpaid, accounts discharged in bankruptcy showing as delinquent or with a balance, and tax liens that are paid and more than seven years old.

Check for incorrect names or addresses and inaccurate employer information, as well. While personal information errors won’t hurt your credit, they could be a sign of fraud or reporting mistakes.

Expect to see your dispute resolved within 30 days (45 if you provide additional documentation within the 30-day timeframe). The FTC sets strict guidelines about how much time a creditor has to respond to a dispute. Over half of all disputes are resolved within 14 days. If you don’t get the desired result, you may need to take up the issue directly with the company that provided the incorrect data. You also have the right to file a complaint with the Consumer Financial Protection Bureau (CFPB) or the Attorney General in your state.

You will be able to check on whether disputed errors affecting your credit score are resolved when you view your free credit score report card, updated monthly, on Credit Sesame.

Here’s what a sample credit report looks like:

Credit Report_900


Learn More: Best Way to Build Credit

  1. Pay on time, every time

Payment history accounts for 35 percent of your credit score. A 40 to 100-point drop after just one missed payment is common. The higher your score, the harder the hit. Making payments on time may not cause a quick bump in your credit score but is crucial to maintaining an upward trajectory.

The good news is that a payment that is a few days late, while it may cost you a hefty late fee, will probably not show up on a credit report. Most creditors don’t report late payments until they reach the 30-day mark. Get back on track as quickly as possible.

The only surefire way to increase your score after a series of late payments is to pay on time, every time going forward. Late payments stay on your credit report for seven years but their impact diminishes after two years.

Check your payment history today on Credit Sesame.

Figure out your cash flow during the month to see if changing your payment due dates might make it easier for you to pay on time. Log in to your accounts or call your creditors to ask them to change your payment dates. You can also use reminder apps, sign up for text alerts and sign up for automatic payments for important credit payments.

Make all of your utility, wireless carrier and rent payments on time. They’ll report late payments, and might even be able to help you establish on-time payment history for some new credit scoring models as well as for some lenders.

  1. Improve your credit utilization for a fast credit bump

There are two ways to go about this and if they are easy for you, you can get a quick credit score bump in a month or two.

Your score takes a hit if any one card is maxed out (even if they aren’t all maxed out).

One way to build credit fast is to make a large lump sum payment on your credit card debt. Your score will increase as your balances (and credit utilization ratio) go down.

If you pay off a maxed out card, your score can improve by 100 points in a few months. The dollar amounts are not as relevant as the amount of debt you carry, expressed as a percentage of the amount of credit available to you. Make plans now to use an upcoming bonus or your next tax refund to pay down your balances, or look for an extra part-time job.

The second way to build credit fast is to get a credit limit increase without increasing your debt. For example, if you have a $1,500 balance with a $3,000 credit limit, your ratio is 50% which isn’t great. If your card issuer increases your limit to $6,000, you’ve brought your utilization rate down to a respectable 25% without paying down the balance at all. This strategy only works if you already have good credit. Be realistic about your ability to handle a higher limit or additional cards. If there is any risk that you might spend more when you get more available credit, disregard this strategy and just focus on paying down your debt.

  1. Use different types of credit accounts if you have really poor credit to improve your score fast

If your credit score is in bad shape because of poor financial decisions or management, you may have trouble qualifying for a traditional credit card to build credit. In that case, get a secured credit card to start the clock on a good track record of paying on time.

A secured card is a credit card that requires a refundable security deposit, made by you, which is held as collateral by the credit card issuer in an account. Basically you are backing up the credit limit on your secured credit card with a cash deposit. Any transactions such as purchases, fees, interest, etc., cannot be deducted from the security deposit, instead you make payments to your account like you would for an unsecured credit card. A secured credit card is generally available to consumers with bad credit or limited or no credit history. Pay off your balances in full on-time every month, to help your score steadily increase. With responsible use by you, such as making your payments on-time, you may be able to transition to an unsecured credit card after six to 12 months. If you can transition to an unsecured account, and all your financial obligations have been met on your secured credit card, you can request the return of your security deposit. Although keep in mind that transitioning to an unsecured credit card is based on a number of factors which vary based on the card issuer, including how you manage the secured account as well as how you manage your other credit or loan accounts.

Another way to get a quick credit increase if your personal credit history is poor is to ask to become an authorized user on someone else’s account. If the primary account holder pays the bill on time and keeps the balance low, your credit score will inherit the benefit of those good financial habits. When you become an authorized user, the positive account information is transplanted to your credit file. On the other hand, if that person doesn’t handle the account well, your score will suffer, so be wary who you ask.

A debt consolidation loan might also work. A consolidation loan is reported as an installment loan, not as revolving credit. So if you pay off your credit cards, your utilization will drop to zero and all you need to do is maintain an excellent payment history on the new loan. Be careful! The last thing you want to do is then go out and charge the credit cards back up. If you do, you’ve only doubled your financial trouble.

  1. Handle unpaid collections with care

Paying off collections may or may not help your score. Your results depend on the credit scoring model used to calculate your score.

  • The newest versions of FICO® and VantageScore® ignore paid collections
  • Pay off the most recent delinquent accounts first because these hurt your score the most
  • Non-medical collection debt hurts your score more than medical collections

Some consumers succeed with debt settlement. That’s when the creditor agrees to accept less than the full amount owed. The catch is that the forgiven amount may be reported as taxable income and you could be on the hook for the taxes.

Once you pay off a collection account, monitor your credit report. It may take several weeks to see the new account status reported to the credit bureau. If 45 days pass and you don’t see the new account status, initiate a dispute with the bureau that’s reporting the account.

Get free credit monitoring and alerts from Credit Sesame.

After seven years, a collection account should be removed from your credit report whether it’s paid or not. If the account doesn’t age off, dispute it. A partial payment could restart the clock.

Keep correspondence. “Zombie debt” is old paid debt that is sold to another collection company who then tries to collect.

“Pay for delete” works for some consumers but can be problematic. The credit bureaus are under no obligation to remove the collection account from your file even if the collection agency agrees. Also, the collection account needs to be removed from all three of your credit reports in order to have the desired effect.

Credit Sesame Members who Improved their Credit

MemberAgeOld credit scoreNew credit scoreCredit Score Increase 
Jesse Diaz37480750270 pointsRebuilt his credit score from a terrible 480 to a respectable 750 and he just bought a house
Adrianna Ortiz25600711111 pointsLearned how to manage her credit score like an adult and just bought her first car
David Hong31609761152 pointsPushed his credit score from just ok to excellent to apply for a home loan

Jesse Diaz, age 37

Rebuilt his credit score from a terrible 480 to a respectable 750 and just bought a house

“Several years ago, I worked for a company that filed for bankruptcy and I lost everything. I lost my car, my apartment and I had bill collectors knocking on my door. Credit Sesame brought all of my credit problems into one place and ultimately helped show me where to start rebuilding my credit score.

Once I began using Credit Sesame, I found out that I was also a victim of identity theft and had a judgement placed against me. Because of those Credit Sesame alerts, I was able to act quickly to straighten out those credit problems as they arose. I went from being totally in the dark to knowing what I needed to do to achieve my credit goals.

Credit Sesame uses grades, like a report card, to let you know where you stand. One of them is Debt-To-Income Ratio and this was a good tool for me to understand when I was in a position to apply for a home loan.

The Borrowing Power tool tells you where you stand in the eyes of a lender and suggests where you will be after specific positive credit actions.

The alerts and real time feedback from both the app and the desktop version kept me motivated. The way it’s laid out visually really helped me understand what affects my credit score.

When you are paying things off and you see your score going up it feels like a game. It empowers you and you think, ‘I can do this!’

Now, I have good credit and Credit Sesame gave me the control to do what I want to do with my life.

I just bought a house and a new car, and have confidence that I can provide for my family.”

Adrianna Ortiz, Age 25

Learned how to manage her credit score like an adult and just bought her first car

“My credit was really bad and I didn’t know where to start. I had a lot of accounts in collections but I just ignored my credit problems.

Credit Sesame definitely helped me find out what my credit problems were and how I could get them resolved. I remember seeing a pie chart about my finances and it showed me the bigger picture of what I had to do and even a time line.

Credit Sesame suggested I apply for a secured credit card to start rebuilding my credit score and a positive payment history. As my score improved, I felt good seeing how much my borrowing power improved.

I check the app when my score updates and I get the alert. I use Credit Sesame maybe three times per month on my desktop to get a big-picture look at my finances throughout month. It doesn’t give me just the basics. It gives me a much more detailed look at my finances and makes suggestions on what I can do to make it better.  

My score has gone up about 100 points since I first started using Credit Sesame and just a couple months ago my boyfriend and I found out our credit was good enough to buy a car.

If I didn’t have Credit Sesame, I wouldn’t have been able to make that step. It helped me manage my finances and now I feel like I have a head start on key opportunities like buying a home. I know where my finances are at now and where I need to go and that feels good.

Now, I feel confident about my credit. I feel like I can take care of my daughter and myself now. I don’t feel like a kid anymore.”

David Hong, Age 31

Pushed his credit score from just ok to excellent to apply for a home loan

“My credit score wasn’t horrible to begin with, but it was not where I wanted it to be and using Credit Sesame helped me to achieve an excellent credit score so I could apply for a mortgage loan to buy a home.

I also wanted to put more money in my savings account but I wasn’t keeping track of my spending. Credit Sesame helped me notice that I was spending more in certain categories in certain months so that if my spending did get out of hand, I could adjust  and correct it the following month.

I used the app almost weekly, if not more, on my phone to easily access my credit score. Seeing the detailed breakdown of my credit card spending constantly available was really helpful.

Overall my score improved more than 150 points which pushed me into the “excellent” credit category.

Credit Sesame gives you all of the tools you need to improve your financial well-being because in order to take control of your financial health you need to be able to monitor your credit score and spending habits. Credit Sesame makes that really painless and efficient and I even got my fiancé to use it, too.

Using Credit Sesame, I really was able to get my financials in order and I think that I am ready to apply for a loan on a home. Achieving this goal gives me a sense of accomplishment and it will allow me to provide the future that I want for my family.”

How to increase your credit score by 100 points with Credit Sesame

Every month that you do everything right (pay on time, keep your balances low and so on) your score will rise. The amount of time it will take to build up a good credit score really depends on your personal situation, what actions you can take and the reasons why your score is low.

Once you make a concerted effort to improve your credit, look for improvement every month when you view your free credit score and free credit report card, updated monthly, on Credit Sesame.

Your action items:

Check your free annual credit reports to see why your score is low. Compare them with your credit report card on Credit Sesame to identify positive actions that will improve your credit score in your particular situation.

  • Dispute all errors, if you find any on your credit report. This action alone will provide a quick credit score increase if the error was hurting your score.
  • Make all your payments on time. Use reminder apps, text alerts and request payment due dates that help you manage cash flow.
  • Make a large lump sum payment on a credit card account to bring down your credit utilization. If you receive a bonus, an inheritance, a tax refund or a raise, use the money to quickly give yourself that quick credit score bump.
  • If you have good credit: Apply for a new credit card or ask for a credit limit increase to lower your utilization.
  • If you have poor credit: Open a secured credit card account to get started on a positive payment history. Or, ask a family member with good credit if you can become an authorized user on their account.
  • Deal with, and monitor your collections accounts, focusing first on the most recent, non-medical collections accounts.
  • Monitor your credit monthly, looking for errors and improvement every month when you view your updated credit score and your free credit score report card on Credit Sesame.
Recap: How to Improve Your Credit Fast
1. Sign up with to get your free credit score, alerts, & monitoring service.
2. Identify the issues you have on your credit report.
3. Take the right steps to improve your credit score fast.
When you make progress, celebrate with our other members. We would love to feature your story!

Sign up for a totally free Credit Sesame membership today.

You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved.
Published July 12, 2011
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randy simon•  September 20, 2016
it was very helpful you guys still didnt show me my credit score the site was shut down can you please open it back up so i can get my credit score.
Roland Williams•  December 7, 2017
I have received a prepaid master it possible to establish your credit with a prepaid card.
Kimberly Rotter•  February 1, 2018
Roland, No it is not possible to establish credit with a prepaid card. You need to get a secured card instead. Kim
Sandra•  January 15, 2018
need help to rebuild my credit to buy a house