Your credit score is an indicator that banks and other lenders use to determine how likely you are to pay off any debts you have.

The higher your score, the more likely you are to repay what you borrow.

On the other hand, having a low credit score is a red flag to lenders, and they’ll probably be less likely to give you a loan or a credit card.

If you currently have a low credit score, it’s not the end of the world. You can improve your credit score if you are patient and disciplined about your finances.

However, there’s no one-size-fits-all solution to improving your credit score. Much of this depends on your current financial situation, your long-term goals and more. 

For example, if you currently do not have any credit history, you will be required to build your credit from the ground up. This takes time.

Conversely, if your credit score is already low, you will need to repair your credit using a number of different methods ranging from paying off old debts to fixing mistakes on your credit report. Read more to learn the most effective methods on how to improve your credit score.

Credit Score 101

Before you begin working towards improving your overall credit score, there are a few basics you should be aware of. Firstly, you need to come to terms with the fact that your credit score will not improve overnight.

In fact, many consumers with a low credit score require a long period of time, sometimes several months or years, in order to improve their credit. The length of time it takes to improve your credit score will also vary depending on the type of debt you have.

Another important thing to know is that not having any debt does not necessarily mean that you also have good credit. Since your credit score is calculated based on your individual credit history, there are various factors that go into calculating your score.  For example, your credit score may also be affected by:

  • Whether you pay your bills on time. If you are consistently late to pay your bills, this will have a negative effect on your overall credit score. This is true both in regard to credit card bills and utility bills you’re responsible for paying each month.
  • How much available credit you use. If you have a credit card and pay it off each month, your score still might be lower than you’d expect. This happens if you have a high credit utilization rate, which means you routinely use a large portion of the credit that’s available to you.
  • The amount of hard inquiries you’ve had into your account. Whenever you apply for a credit card, take out a loan or sign an apartment lease, the people you’re doing business with will need to look at your credit history. This shows up as a hard inquiry, which will temporary lower your credit score.
  • How long you’ve had a line of credit. Credit scores are usually higher for people who have had a line of credit for a long time. If your oldest line of credit is only a year or so old, it’s likely to have a negative effect on your credit score.

How can I pay off my debt?


One of the most effective ways for people with low credit scores to improve their financial situations is to pay off any existing debt they have. This is a good strategy whether the individuals’ debt comes from:

  • Credit cards.
  • Unpaid medical bills.
  • Student loans.
  • Mortgages.

Paying off your debt might seem like a difficult task, but it’s more manageable once you have a plan. First, you need to make a budget you can stick to. Then, you need to adjust your monthly expenses so you can save enough to pay down any debt you have. You can also work to pay off your debt by:

  • Speaking with a credit counselor who can help you budget your resources so you can pay off your debt as soon as possible. 
  • Making timely payments on all credit cards, loans and other credit payments. Ideally, you’d be able to pay more than the minimum payment each month. 
  • Keeping a higher percentage of available credit by paying and lowering debt.
  • Keeping low balances on all of your credit cards.
  • Paying off any bills or credit accounts that are past due.

Catching Costly Errors on Your Credit Report

Credit reporting agencies sometimes make mistakes on credit reports, which can cause borrowers to have a lower credit score than they should. These errors can arise from clerical mistakes, such as incorrectly inputting a date or Social Security Number (SSN) in a person’s records.

Furthermore, many people who notice errors in their credit reports usually find that these mistakes are simple to fix. Once you find an error, you can report it to the appropriate credit agencies. The Fair Credit Reporting Act (FCRA) ensures that credit agencies and organizations are responsible for correcting any erroneous information on a credit report. This also applies if you are the victim of identity fraud. 

You can request one free credit report each year. This way, you can keep track of your financial standing and make sure your credit score accurately reflects your borrowing history. You can also request your credit report individually from each of the three credit bureaus.

Check Your Credit Report From These Bureaus

What if I do not have a credit score?

If you do not have any credit history, you won’t have a credit score. Therefore, you will need to begin building your credit before you can receive a credit report. There are many ways to start building your credit, but applying for a credit card is one of the most common ways.

If possible, those who are younger than 21 years of age should start building credit by having their parents or legal guardians cosign their credit card. Parents may also choose to list their children as authorized users on their cards. This way, the children can receive some of the benefits of their parents’ good credit history without needing to open their own credit card account. 

Applicants who are older than 21 years of age may prefer to open up a “secured” credit card with their banks. Individuals who open secured credit cards are responsible for putting a down payment on their card. This amount becomes the user’s credit card limit. Since these cards pose little risk to the institutions that issue them, people with low credit scores or no credit history can usually obtain them.