Building credit takes time. We may crave instant gratification, but credit scores don’t work that way. They’re meant to show an overall picture of your financial health, so it makes sense that they’re not susceptible to a quick fix here and there. The best advice for rebuilding credit is to manage it responsibly over time. If you haven’t done that, then you need to repair your credit history before you see credit score improvement. Luckily, you’re not alone. Plenty of people struggle to improve their credit scores and there are numerous ways to build good credit — and reap the rewards that come with having a good credit score.

  • Fix Your Late Payments

Even closing an account won’t make your late payments disappear. Your best bet here is to get yourself back on the right track — set up payment due date alerts with all your credit cards and loans, and get organized. You can move credit card payment due dates around pretty easily on your bank or lender’s website. Be sure to check your payment due dates in relation to your paycheck schedule.

Ask your credit card issuer or lender if they can forgive that late payment. Maybe you were out of the country on vacation or the check got lost in the mail and you had no idea the bill existed. Credit card companies in particular are pretty forgiving if you have a long track record of making on-time payments.

  • Clear Up Any Collection Accounts

Pay off your debt instead of repeatedly transferring it to new accounts. Contact the debt collector listed on your credit report to see if they’d be willing to stop reporting the debt to the credit bureaus in exchange for full payment. This technically violates some of the collectors’ agreements with the credit bureaus, so it may be a non-starter, but it never hurts to try. Just be sure to get that promise in writing before you make a payment. Also, if it’s a debt that you don’t recognize or seems inaccurate, dispute it with all three credit bureaus. You may get it removed and see your credit score improve quickly.

  • Fix Your Credit Utilization Ratio

If your credit card balances every month are more than 30% of your limits, your score is suffering, even if you’re paying off your balances in full every month by the payment due date. That’s because your statement balance is most likely what’s being reported to the credit bureaus. So, keep an eye on those balances, and consider pre-paying some of the balance if you know you’ll be above that 30% mark this month.

Like we said earlier, improving a poor credit score takes time, but it’ll be completely worth it. Constantly worrying about being approved for loans, mortgages and new credit cards is not something you want to be doing for the rest of your life. Following these tips will not only save you money, but also teach you the valuable skills necessary to maintain a good credit score in your future. If you have bad credit, don’t give up on credit entirely. Instead, be responsible and stay educated about your accounts and scores so you can successfully handle your own finances.

  • Limit Applications

The 10% discount for signing up for a store credit card may seem worth it in the moment, but your credit score will take a hit for applying, whether you get approved or not. A hard inquiry will impact your credit score for a full year, though your score will start improving almost immediately after you apply. The hit is small (normally around 3 to 5 points) but if you’re on the edge of two credit score tiers or applying for lots of credit offers in a short time span, you can do a lot of damage.


  • Open a Secured Credit Card

A secured credit card is a type of credit card where you make a deposit into a checking account that “secures” the line of credit the bank or lender is extending you. For example, you can open a checking account and put $200 in it and get a line of credit for $200 (though some secured options will give you a higher credit limit than your deposit). You can get a secured card with bad credit, and adding a new account with a positive payment history will go a long way in showing creditors you’re back on solid ground.

  • Diversify your credit mix

Your credit mix refers to the various types of accounts included in your credit reports.

While it probably won’t make or break your credit scores, lenders typically like to see a mix of revolving credit accounts (i.e. credit cards) and installment loans, such as mortgages, auto loans and student loans.

The more you diversify the money you borrow, the better. Of course, it’s not a good idea to take out a loan you don’t need just for the sake of adding some extra color to your credit mix.

  • Don’topen too many new credit cards at the same time

Be careful not to open too many credit cards within a short time period.

Every time you apply for a credit card or loan, it generates what’s known as a hard inqury, which stays on your credit reports for about two years and may have a small negative effect on your credit scores.

Too many hard inquires in a short period of time may set off a red flag for lenders, as it suggests you may be scrambling for cash or getting ready to add on a ton of debt.

This doesn’t mean you should never apply for new credit. Just be sure to spread out your applications.

  • Don’t close old credit cards.

The length of your credit history is a significant factor in most credit scores. Some credit scoring models may consider only the average age of all your accounts, while others may also factor in the age of your oldest open account.

You risk shortening the length of your credit history by opening too many new credit cards at the same time or closing your oldest credit cards.

We know it can be tempting to get rid of those old cards you no longer use, but hear us out. Closing an account doesn’t just affect the overall age of your credit history. It could also lower your available total credit and increase your credit utilization ratio.