How to improve your credit score quickly

Jennifer Barrett
A free video tutorial from Jennifer Barrett
4.4 instructor rating • 1 course • 26,006 students

Learn more from the full course

Acorns' Guide to Personal Finance

5 Steps to Building Wealth: Budget Better, Pay Off Debt Faster, Save and Earn More Money and Invest Wisely

46:33 of on-demand video • Updated January 2018

  • How to calculate your net worth.
  • How to start a successful side hustle.
  • How to set goals—and build a budget that will help you reach them.
  • How to ask effectively for a raise or a better job offer.
  • How to pay off debt faster—and pay less in interest.
  • All the basics of investing in stocks and bonds.
  • How to cut your expenses without feeling the pinch.
  • How to build a low-maintenance portfolio that will help you build wealth.
  • How to save more money (101 ways!).
English In the last section, we talked about how having good credit can make a big difference if you're negotiating... a better interest rate. In fact, your credit score can affect your ability to get everything from a low-interest rate on a credit ...card to a mortgage, even a job. So, how do you get your credit score? And how do you know whether it's good or not? Your FICO score, which is used by many lenders, can range from 300 to 850. A score above 750 is considered... excellent. In other words, you'll qualify for the best rates on loans and credit. If it's somewhere in the bottom half of the range pictured here, though, you're looking at the very real possibility of... rejected applications or super high interest payments. You can get a free look at your score through... sites like CreditKarma.com or CreditSesame.com. More than a dozen credit card issuers also offer that option. So check your recent statement, or check your account online, to see if yours does. So, what if your score is not so great? Well, there are some relatively simple ways to improve your score in a matter of months. You can get a free copy of your credit report once every 12 months from each of the three reporting... agencies. That's Equifax, Experian and TransUnion. You can get that at annualcreditreport.com. And that should be the only site you use because it's the only one that's authorized by federal law to offer them for free. As you're scanning your report, take note of any errors like late payments from more than seven years... ago. Those should be wiped out. Or look for any credit cards you never opened. If you do find a mistake, contact your lender first and then let the credit agency know. It usually takes about 30 to 60 days to see it reflected on your reports. Another way to raise your score quickly? Credit reporting agencies reward people who use a small percentage of the total credit that they have available. That's a calculation that's known as the credit-utilization ratio. Generally, you should aim to spend less than 30 percent of all the credit that you have available. Let's say your card has a $5,000 limit. Then your balance should not go over $1,500. You can improve this ratio in two ways. One, by paying off more debt. Or two: by calling up your creditors... and asking for a bump up in your limit. That last one is often the quickest way to improve your ratio. And that ratio counts for 30 percent of your score. Keeping credit cards open even if you don't use them can also help keep down your credit-utilization... ratio by keeping your overall credit limit higher. It also helps to extend the length of your credit history, assuming that you've always paid on time. And that... accounts for another 15 percent of your score. Finally, it may seem obvious, but one of the most powerful things you can do is to pay all of your... bills on time, if you're not doing that already. This accounts for 35 percent of your credit score—more than anything else. Nearly every utility, car, student loan and credit card company allows you to set up automatic payments. It's a pretty easy way to make sure that you don't miss a payment and mess up your credit.