If you've spent any time in the personal finance space (perhaps by hanging out here at The Ascent?), you've no doubt read a lot about credit scores. Your credit score has a big impact on your financial life -- finance guru Tori Dunlap calls it your "adulting GPA." This three-digit number tells lenders what kind of borrower you are and whether you can be relied upon to pay back loans, credit cards, and more.
I recently boosted mine by 100 points in just eight months. This is a dramatic jump, to be sure, but just about anyone could take the steps I did and improve their own score, even by just a little bit. Even a modest improvement can help you get lower rates on loans and a greater likelihood of being approved on a credit card application.
Beginning score: 727
My financial life has been a mixed bag. I bought a house I couldn't afford when I was in my 20s, and it took me several years to get free of that boondoggle with a short sale. But after the credit score hit I took from that, I decided to stay on top of what I could control. Namely, making on-time payments to my creditors. I haven't made a late payment to any of them in the wake of the house debacle, and as a result, I was managing to keep my credit score in the lower 700s (which is in the "good" range for FICO® Score). This was despite being deeply in debt, too. Payment history makes up the largest percentage of your FICO® Score, accounting for 35%. And if you think about it, that makes sense -- if you make your payments on time and in full, that tells lenders you're good at managing credit. As of July 2022, my FICO® Score stood at 727. I credit this to my stellar payment history as well as maintaining older credit accounts -- this was a year before I decided to cancel my oldest credit card. Length of credit history makes up 15% of a FICO® Score.
After eight months: 827
In late 2021, I started looking for a side hustle to help me pay off debt and perhaps start saving money to buy a home. I'm not the kind of person who knows how to do anything halfway, so once I found a side gig, I threw myself into working long hours and rolling my money into debt payoff.
I finished paying off what I owed in October 2022, but it took several months for my FICO® Score to finish growing by 100 points. This makes sense; the three major credit bureaus have different reporting schedules, and in fact, we all have multiple credit scores. FICO® Score is the one used by 90% of lenders, however. As of March 2023, I had reached 827.
Where did that 100 points come from? By this point, I was still maintaining all my old accounts, and I had added just one (which had boosted my total credit limit significantly). Meanwhile, since I had paid off debt, my credit utilization ratio (reflected in 30% of a FICO® Score) had gone down to a tiny percentage. Your credit utilization ratio is the amount of credit you're using at any given time; it's recommended that you keep it under 30% to avoid credit score damage. The mix of continued on-time payments, a long credit history, a higher credit limit, and a very low credit utilization ratio gave me a credit score in FICO's "exceptional" range.
Want to boost your credit score?
If your credit score could use some work, here's how you can improve it.
- If you're carrying debt month to month like I was, see if you can get some of it paid off. I recognize that not everyone will be able to spend as much time working a second job as I did, but even picking up a casual side hustle or getting a raise at your regular job can help immensely.
- Commit to making on-time payments. Remember, payment history is 35% of your FICO® Score, so it really, REALLY matters.
- It's a good idea to get a copy of your credit report and pick through it for errors. If you spot old delinquent accounts that should've fallen off your report, you can dispute them with the credit bureau that issued the report. The same goes for errors, like accounts that were never yours.
- Apply for new credit sparingly. During the eight-month period where I saw this credit score gain, I applied for exactly one new credit card: a grocery rewards credit card that is now earning me cash back on one of my biggest expenses. Credit cards are a useful financial tool, and it's worth taking the time to find the right ones for you before you apply.
Take a deep breath, check your credit score (and credit reports), and make a plan to boost it. Your future self will thank you.
FAQs
Your credit score has a major impact on your personal finances. I raised mine by 100 points via debt payoff, making on-time payments, and applying for new credit sparingly. If your score needs work, don't forget to check your credit report for errors.
How fast can credit score go up 100 points? ›
While there are no shortcuts for building up a solid credit history and score, there are some tactics that can provide you with a quick boost in a short amount of time. In fact, some consumers may even see their credit scores rise as much as 100 points in 30 days.
How many points can your credit go up in a year? ›
Between October 2022 and October 2023, the 1,496 people whose credit reports we reviewed anonymously saw their scores increase by an average of 127 points — from 548 to 675, moving from the high end of what's considered a poor credit score to the low end of good. That's a big deal.
How quickly can a credit score go up? ›
To break it down, the time it'll take to raise your credit score depends on the reason your score needs boosting in the first place. If your score is low because you don't have much credit history or you're just starting your credit-building journey, you may be able to boost your score within months.
Can I raise my credit score 200 points in 3 months? ›
While you could raise your score by 200 points, nailing down the timeline can be nearly impossible. However, you can see a boost to your score over time when you take actionable steps, like limiting credit card usage and paying bills on time.
Is 650 a good credit score? ›
As someone with a 650 credit score, you are firmly in the “fair” territory of credit. You can usually qualify for financial products like a mortgage or car loan, but you will likely pay higher interest rates than someone with a better credit score. The "good" credit range starts at 690.
How to get 800 credit score in 45 days? ›
Here are 10 ways to increase your credit score by 100 points - most often this can be done within 45 days.
- Check your credit report. ...
- Pay your bills on time. ...
- Pay off any collections. ...
- Get caught up on past-due bills. ...
- Keep balances low on your credit cards. ...
- Pay off debt rather than continually transferring it.
While achieving a CIBIL Score of 900 is technically possible, it is extremely rare. Scores above 760 are considered very good or exceptional, providing significant benefits such as lower interest rates and higher chances of loan approval.
What's the highest your credit score can jump in one month? ›
Once the incorrect information is changed, a 100-point jump in a month might happen. Large errors are uncommon, and only about one in 20 consumers have one in their file that could impact the interest on a loan or credit line. Still, it's important to monitor your score.
Why did my credit score go up when nothing changed? ›
There are any number of reasons your credit score can change even if you don't take any specific action, including routine updates to the credit reports that are used to calculate your scores, progress paying down loans and even just the passage of time.
4 tips to boost your credit score fast
- Pay down your revolving credit balances. If you have the funds to pay more than your minimum payment each month, you should do so. ...
- Increase your credit limit. ...
- Check your credit report for errors. ...
- Ask to have negative entries that are paid off removed from your credit report.
If you have a credit card balance, it's typically best to pay it off in full if you can. Carrying a balance can lead to expensive interest charges and growing debt. Plus, using more than 30% of your credit line is likely to have a negative effect on your credit scores.
How many points does your credit score go up when you pay off a credit card? ›
Chip Lupo, Credit Card Writer
Your credit score could increase by 10 to 50 points after paying off your credit cards.
How to repair credit fast? ›
How to improve your credit score
- Check your credit report for errors. ...
- Prioritize paying on time. ...
- Work to pay down your debts. ...
- Become an authorized user. ...
- Request a credit line increase. ...
- Handle debt in collections. ...
- Consider opening a secured card. ...
- Get credit for other payments.
For base FICO Scores, the credit score ranges are: Poor credit: 300 to 579. Fair credit: 580 to 669. Good credit: 670 to 739.
What is the average credit score? ›
The average credit score in the United States is 705, based on VantageScore® data from March 2024. It's a myth that you only have one credit score. In fact, you have many credit scores, because there are many different types of credit scores and scoring models. It's a good idea to check your credit scores regularly.
How long does it take to build credit from 0 to 700? ›
If you have no credit history, it could take 6 months to a year to reach a decent credit score around 700 with FICO® or VantageScore® models. To attain an excellent score of 800 or higher, expect several years of consistent and responsible credit behavior.
Can your credit score drop 100 points in a month? ›
On-time payments are the biggest factor affecting your credit score, so missing a payment can sting. If you have otherwise spotless credit, a payment that's more than 30 days past due can knock as many as 100 points off your credit score. If your score is already low, it won't hurt it as much but can still do damage.
Can my credit score go up 40 points in a month? ›
You can quickly increase your credit score by 40 points by reducing your utilization, disputing errors on your credit report, adding on-time rent or utility bills to your reports, and keeping up with your current payments. It is possible to improve your credit score in one to two months.
