How to Build Your Credit Score: 8 Steps

You're probably well aware of just how important it is to have a solid credit score. You can think of it as the gateway to a loan or a line of credit with the best rates and most attractive terms. Without strong credit, you'll likely have a tougher time getting approved for a loan or credit card. Plus, you'll probably be paying more in interest.

No matter what stage you're at in your financial journey, there are simple steps you can take today to build credit more quickly. That's right, you don't need to pay for a pricey service or membership. This is something you can do entirely on your own. Here's how:

1. Review your credit report

Your credit report contains important details about your credit history, such as your open and closed accounts, payment history, and credit inquiries. It also shows public records such as liens, bankruptcies, and judgments.

Errors on your credit report are more common than you think. The Consumer Bureau of Financial Protection (CBFP) received over 443,000 complaints of errors and incorrect information in 2023. This is more than the two previous years combined. Some of these mistakes, such as payments incorrectly being reported as late, can hurt your credit.

You can order your credit report for free from AnnualCreditReport.com. If you spot anything wrong, you can file a dispute with the credit bureau, and by law, they generally have 30 days to review it and get back to you.

Only file a dispute if you spot information that's inaccurate or missing. The credit bureaus are only required to remove errors on your credit report. You can’t remove negative information that’s accurate and current from your credit report.

Time it takes: It's best to review your credit card for errors at least once a year, but the more often, the better. Aim to do it twice a year or every quarter if you can.

2. Make on-time payments

Of the five main factors that go into a credit score—payment history, amounts owed, length of credit history, new credit, credit mix—your credit history makes up the lion's share (35%). It's crucial that you stay on top of your credit card and loan payments.

To help you stay on track, set up automatic payments. If you run low on funds when it's time to make a payment, consider splitting your monthly payments in half and have them coincide with your paychecks.

For instance, let's say your credit card payment due date falls on the 20th, and you get paid on the 15th and 30th of the month. To get ahead, pay the first half of the amount due on the 30th for the bill that's due the next month. Then, pay the second half on the 15th of the following month.

Example: You've been paying $100 each month toward a credit card balance. The next payment due date is June 20th. You pay $50 from your May 30th paycheck, and the remaining $50 from your June 15th paycheck.

Time it takes: If you set up automatic payments, it shouldn't take much time at all.

3. Reach out to lenders and creditors

It's entirely possible to request that due dates be made on your payments so they're more in sync with your cash flow. That way, it might be easier for you to be on time. For instance, if you get paid monthly on the 15th, ask your creditors and lenders if your due dates can be shifted closer to mid-month.

While you're at it, see if you can negotiate for more favorable terms, such as lower interest rates or more flexible repayment terms. You don't know until you try, and it never hurts to ask!

Time it takes: Depending on the number of lenders and creditors you need to reach out to, this might take some time.

4. Limit applying for new accounts

New credit card deals and promo bonuses might be luring, no doubt. But when you apply for a line of credit or loan, lenders and creditors need to do a hard pull of your credit. This can hurt your credit, and your score usually dips by a few points. Only apply for a new account if it's necessary.

If you need to open an account, see if you can get prequalified. When you apply for pre-qualification, the lender or creditor will give you an estimate of your loan amount, rates and terms. The best part is that they will do a soft pull on your credit, which won't impact your score.

That way, you can narrow down your choices before actually applying. Instead of officially applying for loans at 10 different lenders—which results in hard pulls of your credit—you're only applying with a few lenders or even just one.

Another option when shopping for rates on an installment loan, such as, car loan, or mortgage, aim to make all your inquiries at the same time. Lenders and creditors will recognize that you are hunting around for the best rates. If possible, try to apply for new financing within 14 to 45 days.

Time it takes: Little time investment, as it's about holding back from applying for new accounts.

5. Keep old accounts open

It turns out your credit history makes up 15% of your score. The longer your accounts are open, the better for your credit. So, even if you don't use a credit card very often, keep the line open.

You can also set a lock on your account to steer clear of fraud. To avoid a creditor closing your account due to a period of inactivity, make sure to use your card on occasion.

Time it takes: Very little time. Just keep them open, and make sure you use all your cards every so often to keep your accounts active.

6. Consider debt consolidation

Debt consolidation is when you lump together high-interest debt into a single, new loan. It not only streamlines your payments, but it can potentially bump down your interest rate or monthly payments, or both.

The major plus is that debt consolidation can help you make steady progress on your debt payoff, which could elevate your score over time. You'll need to make on-time payments with your new loan. Falling behind on your payments, on the other hand, can cause your score to decrease.

Time it takes: You'll want to investigate your options, and it will take some time to sign up and schedule your payments.

7. Look into a credit builder account

Another option to potentially build your credit score, consider a Self Credit Builder Account*. You can build credit while building savings and you can start with just $25** a month. There's no hard pull on your credit. The loan amount is placed in a certificate of deposit (CD). You make monthly payments which are reported to all three credit bureaus. Once the Credit Builder Account is paid off, at the end of your loan term, you get your funds back (minus interest and fees). That's money you can use however you like.

Time it takes: You need to apply, open an account and make monthly payments over 24 months.**

8. Report rent and utility payments to credit bureaus

While your rent payments don't usually show up on your credit, you can report them by using a service such as Self's free rent reporting.*** Your on-time rent payments will be reported to all three credit bureaus, and there's no charge. If you want your utility and cell phone bill payments to also be reported to TransUnion, you can sign up for a subscription at $6.95 a month.

There's no hard pull on your credit, and there's no minimum credit score or credit history required to get started. By signing up for a rent reporting service, you can potentially grow your credit score since only positive rent payments are reported.

Time it takes: To sign up, you connect the bank account you use for rent payments, and pick the rent payment you want reported and make on-time rent payments. Self will report those payments to the 3 major credit bureaus.

Bottom line

While there's no overnight, quick-fix to growing your credit, there are simple, no-brainer ways to gradually lift your score. By making these moves, you could be on your way to a better score. Why not start today?

*Credit Builder Accounts & Certificates of Deposit made/held by Lead Bank, Sunrise Banks, N.A., SouthState Bank, N.A., First Century Bank, N.A., each Member FDIC. Subject to credit approval.

**$25/month, 24 months, 15.92% APR; See self.inc/pricing.

***Individual results vary. You may not receive an improved credit score. Other factors, including activity with other creditors, may impact results. Not all lenders, including auto and mortgage lenders, use scores impacted by rent, cell & utility payments. Not all bill payments may be eligible.

About the author

A personal finance writer for over 8 years, Jackie Lam covers money management, lending, insurance, investing, and banking, and personal stories. An AFC® accredited financial coach, she is passionate about helping freelance creatives design money systems on irregular income, gain greater awareness of their money narratives, and overcome mental and emotional blocks.

Her work has appeared in publications such as Bankrate, Time's NextAdvisor, CNET, Forbes, Salon.com, and BuzzFeed. She is the 2022 recipient of Money Management International's Financial Literacy and Education in Communities (FLEC) Award, and a two-time Plutus Awards nominee for Best Freelancer in Personal Finance Media. She lives in Los Angeles where she spends her free time swimming, drumming, and daydreaming about stickers.

Editorial policy

Our goal at Self is to provide readers with current and unbiased information on credit, financial health, and related topics. This content is based on research and other related articles from trusted sources. All content at Self is written by experienced contributors in the finance industry and reviewed by an accredited person(s).