How to Increase Credit Score

Learn the basics about how long negative information stays in your credit and mistakes to avoid when improving your credit score.

Since a credit score is very important for getting the best credit offers and favorable interest rates, many people face a number of problems when they want to rebuild it. It is impossible to say exactly how long it will take to improve your credit, but you can study the basic information on how to improve it as quickly as possible.

Having a good credit score is very important these days as it helps you get the best credit offers, loans with favorable terms, and good interest rates. However, not all people have a good credit score. That is why, when they want to get a loan, they often face a number of problems. Thus, rebuilding credit is a pressing issue these days.

Of course, rebuilding credit takes time, and there is no specific period in which you will be able to do this. The results depend on your unique credit profile and what specific events damaged your score. However, do not give up ahead of time, as you can always rebuild your credit. First of all, it is worth examining the factors that affect the improvement and deterioration of your credit history. Thus, by taking concrete steps, you can begin rebuilding your credit and see results in the near future.


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So what affects your credit score?

Before you start rebuilding your credit, it is important to study the factors that affect your credit score. Below are the main ones that you need to pay attention to.

  • Payment history is one of the most important factors affecting your credit rating. Making payments on time will help your credit score to be improved fast. However, if you miss or forget about payments, it can damage your credit. Of course, the later the payment is made, the worse you do to your account. If you have filed for bankruptcy or have a charged-off account this also has an impact on your credit. Thus, a payment history can help you improve as well as worsen your credit, which is why it is important to make payments on time. If you forget about them, you can set up auto-payment, which will solve this problem.
  • The length of your credit history also matters. If you have a long history of managing credit accounts this will help you improve your credit score. Valuation factors that affect your credit score are also the ages of your oldest and newest accounts, as well as the average age of all your accounts.
  • Another important factor affecting the credit score is current debts. Your current debt amount relative to your initial loan amount also affects your credit score. However, the most important is your credit utilization ratio, that is, is the amount of revolving credit you're using. So, if you are using a small percentage (about 30 percent or less) of your credit limit, it is good for your credit score. If you use more than 30 percent of your credit limit, it will negatively affect your credit. If your financial situation allows you, it is better to pay your bills in full each month in order to avoid paying additional interest.
  • Recent credit applications. If you have recently applied for new credit accounts, this also affects your credit score. Moreover, if you wanted to get a loan and you were refused, most likely you turned to another lender. Unfortunately, it can negatively affect your credit. Most lenders do hard credit checks, so it is also reflected in your credit.
  • Different types of accounts. If you have a revolving credit account such as a credit card and an installment credit account (such as a student or mortgage) it is better for your credit account than if you only have one type of account.

So, the main factors that can both worsen and improve your credit score are your payment history and current debts. However, if you're rebuilding your credit it is important to consider all factors in order for the improvements to come as quickly as possible.

What can you do to rebuild your credit?

It's necessary to remind you that building your credit from scratch is a bit easier than trying to fix it. So, if you have a bad credit rating, this is often a problem. However, everything can be fixed! Learn a few basic steps to help you improve your credit quickly.

  1. Check credit reports. Many people do not pay attention to this step, but it is very important. Before doing anything else, it is important to look through your credit report as there may be errors or inaccuracies. So, if you find any information that you think is inaccurate, you need to notify the credit bureaus about it.
  2. Pay all your bills on time. Making payments on time will greatly improve your credit. It should be understood that you need to do this constantly, and also you should not allow missed payments to appear in your credit. Pay first and foremost on those bills that get reported to the credit bureaus (that is, loans and credit cards). If you forget about paying off debts, you can set up automatic payments that will solve this problem once and for all. Show yourself as a trustworthy person and the result of improving your credit score will not be long in coming.
  3. Use a credit-building account. When rebuilding your credit, it is very important to add positive information to your credit history. So, even if you don't need money and don't want to take out a loan, a secured credit card or credit-builder loan can be a good idea to improve your credit. However, you should only do this if you don't have any accounts that are being reported to the credit bureaus.
  4. Pay off your credit card debt. If you are looking for a quick credit improvement, you should pay attention to credit card debt. Of course, high utilization is bad for your credit score, so in order to fix this, you need to pay off the debt. If you cannot currently pay off your cards, you can apply for a personal loan in order to consolidate your existing debts. However, remember, you should only do this if the personal loan has better interest rates.

Thus, it is important to pay attention to all aspects if you want to improve your credit. Focus on meeting timely payments and paying off existing debts. If you do this, you will soon see your credit improve.

How long does negative information stay on your credit report?

Unfortunately, some mistakes can stay on your credit report for 7 to 10 years. This is one of the reasons why it can be difficult to fix your credit history. Since your credit score is calculated using your report, long-term negative ratings can affect your credit score over a long period of time.

Of course, over time, the impact of negative rating decreases, but they are still part of your credit history. Thus, it is very important not to make mistakes that will stay in your report for many years. So, credit inquiries stay on your report for 2 years, collection accounts, chapter 13 bankruptcy, and also late and missed payments for 7 years. What's more, chapter 7 bankruptcy stays on your credit report for as long as 10 years!

Hard credit inquiries are an exception, as FICO only considers them for the first 12 months (even if credit bureaus keep them on your credit report for several years).

What else can you do to improve credit?

As you already understood, rebuilding your loan is a rather difficult process. You will not be able to improve your credit score if you are unable to pay off debts or are constantly missing payments. Of course, in order to improve your credit to a perfect 800 credit score, you must first of all cut costs and draw up a payment plan. So, explore what else you can do if you want to improve your credit as fast as possible.

If you cannot handle a difficult financial situation on your own, there is still a way out. For example, you can contact nonprofit credit counseling agencies. Oftentimes, they offer free and low-cost services such as helping with various types of debt, budgeting, and so on. What's more, some of them also offer debt management plans. This option will be good for those who have problems with unsecured debts.

If you decide to use the debt management plan service, then you need to know how it works. First of all, your consultant will negotiate with your lenders in order to lower interest rates and commissions. Moreover, it will also be able to influence the decrease in monthly payments. So, when you use a debt management plan, you will be making one monthly payment to the agency of your choice. Further, the agency will divvy up the money and pay your lenders.

Also, if you want to improve your credit, it is very important to monitor your progress all the time. Thus, you will be able to see how your credit is changing and understand if you are moving in the right direction.


Of course, building credit won't be as easy as getting it worse. Sometimes it is enough to miss payments several times and the credit score will deteriorate significantly. However, you have to do a lot to get everything back.

First of all, start writing down all your income and expenses. It is also important to make a payment plan and take into account all of your current debts. Thus, if you remember to pay off your loans, your credit rating will improve. If you cannot control this, set up automatic payments. Also, don't use your credit limit more than 30 percent. It is also important to study credit reports in case there is a mistake. If you find this, you need to report the error or inaccuracy to the credit bureaus.

Remember that credit improvement is a long process, but if you do everything right, the result will not be long in coming!