How to Raise Your Credit Score Fast If You Have Bad or No Credit History

Updated · May 28, 2022

If you're reading this, then you probably don't have the best credit score.

And that's okay—a lot of people don't. In fact, about 22% of Americans don’t even have a credit history.

So, if you're one of those people and you want to know how to raise your credit score fast, read on.

We’ve prepared a list of useful tips.

How to Increase a Low Credit Score

Sure, money doesn’t buy happiness. But a bad credit score could make your life quite miserable.

Your credit score is a snapshot of your financial health. It determines whether you can get a car, house, or credit card.

A high credit score makes you a low-risk borrower. In turn, this leads to lower interest rates.

Vice versa, a low credit score can lead to higher interest rates. Even worse, it could mean you won't be approved for a loan at all.

But what can you do if you already have a bad credit history?

1. Check Your Credit Score

Your credit score reveals how reliable you are as a borrower. It affects your ability to get a loan, a mortgage, or a credit card.

Before applying for a loan, you might need to figure out how to fix your credit score.

Once you start working on it, you should check it every few months to track your progress. That way, you’ll know when is the perfect time to apply for credit.

You can get it for free from Credit Karma or Credit Sesame. You can also ask your bank whether it offers that option.

What’s more, Capital One allows you to see your VantageScore even if you don’t have a credit card with them.

2. Check Your Credit Report Regularly

Once you know what it is, here’s how to boost your credit score:

Start by checking your credit report for errors or outdated entries.

You can dispute information in your report by writing a letter to the credit bureau that issued it. Include documents that support your claim. And be sure to keep a copy of your letter for your records.

If you have any questions or need help correcting errors on your credit report, you can contact the National Credit Reporting Association (NCRA).

The NCRA is a nonprofit organization that provides consumer education and support for credit-related issues.

After you start working on your credit boost, you can subscribe to a credit monitoring service. It will help you keep an eye on your credit history and identify potential fraud.

3. Get Rid of Old Debt

One of the best ways to increase your credit score is to pay off old debt. This will improve your credit utilization ratio and increase your disposable income.

There are a few ways to go about it. The best option for many is to try and negotiate a new payment plan with the lenders. It's better to do this before you've started delaying or missing your payments.

If the lender closes your account, the default will stay on your credit report for six years, regardless of whether you pay your debt or not.

This will make it even harder to ​​boost your credit score.

If this doesn't work out, you can use a debt consolidation loan to get everything paid off at once.

If you have several high-interest debts and find it hard to manage all your payments, getting a consolidation loan with lower interest will be beneficial.

It'll help you organize your finances. Plus, you'll need to make only one payment, so you won't miss it. And if you pay on time, this will boost your credit in the long run.

However, be careful with this option. If not used correctly, it can lower your score even more.

If the loan has a high interest or a long repayment period, you might end up paying more. Besides, it is not a quick solution.

So, think carefully before you resort to this option.

More importantly, whichever method you choose, be sure to stay on top of your payments in the future.

4. Pay Off Any Collections

When you're trying to improve your credit score, one of the most important things you can do is pay off any collections accounts.

These are created when you fail to pay your bills and the lender transfers your debt to a collection agency. Then, the agency contacts you to request payments.

Collections are a major black mark on your credit report. They can cause your score to drop by up to 100 points.

It impacts your payment history, which is the most significant factor in determining your FICO score. The longer you're late with a payment, the more weight it has.

What’s more, it stays in your credit history for seven years. The good news is that its impact diminishes over time.

Still, it can make it difficult to get approved for a loan or a mortgage. So, try to repay it, especially if it is more recent.

5. Become an Authorized User

If you're looking for a way to boost your credit score instantly, becoming an authorized user on a friend or relative's credit card account could be the answer.

They can add you to their credit card account as a third party.

You won’t be responsible for making payments on the card, but the credit card company will report your activity to the credit bureaus.

It sounds like the perfect deal. But before you jump in on it, make sure you trust the cardholder. If they don't pay their bill, it could hurt your credit score.

6. Don’t Close Paid-off Credit Cards

Having a lot of debt might lower your credit score. That said, holding an account without an outstanding balance open could be the best way to build credit.

For starters, it shows you are capable of repaying debt and making payments on time.

Next, it increases the length of your credit history.

Last but not least, it adds to the overall amount of your credit limit. This, in turn, has a positive impact on your credit utilization ratio.

Speaking of that...

7. Keep Your Credit Utilization Rate Low

Credit utilization rate is the amount of revolving credit you're using divided by the overall amount available. It's expressed as a percentage.

For example, if you have $1,000 in credit card debt and $10,000 in available credit, your credit utilization rate is 10%.

So, how can you use this to improve your credit score?

FICO and VantageScore take into account both your overall and per-card utilization ratio.

So, try to keep both below 30%. Here’s how you can do that:

  • Distribute the sum you’re using between all your cards. If you have a big outstanding balance on one of them, focus on repaying it.
  • Negotiate with your lenders. They might be willing to increase your credit limit. Start with the card with the highest utilization rate.
  • Open a new credit card account. This will give you more available credit and keep your overall ratio low.

8. Be Mindful When Opening New Accounts

If you’re wondering how to increase your credit score, one of the first things that might come to mind is opening different types of credit.

But don’t be tempted to open too many new credit accounts at once just to achieve that. This can have the opposite effect and harm your score.

Sure, your credit mix has a small but significant effect on your credit score. Having different types of credit shows lenders you can handle debt well.

That said, opening a new account lowers your score.


Because if you've just taken on more debt, you might not be able to repay another one so soon.

Granted, your credit score will bounce back and even increase in time if you're making regular payments and maintaining a low utilization rate. It’s one of the good strategies to improve your credit score in the long term.

But if you already have a lot of debt or are planning to apply for a loan soon, this will be more harmful than beneficial.

How to Raise Your Credit Score Fast Without a Credit History

Fixing a bad credit score is tricky (although not impossible).

But building one if you don’t have a credit history is not an easy feat either.

Let’s see what you can do.

1. Get a Secured Credit Card

One of the best ways to build credit fast is to get a secured credit card. They are designed for people without a previous credit history

All you need is to put down a security deposit—like when you’re renting an apartment. The deposit reduces the risk for the lender.

If you miss a payment, they’ll take it from your deposit. But if you pay regularly, you’ll improve your credit score quickly.

In fact, if you use your secured card responsibly, you can see your score increase by 100 points or more in just a few months.

So, if you want to build a good credit score, a secured card is a great first step.

2. Use Your Credit Card Responsibly

Getting a credit card is easier than getting a loan, so it's a great first step in achieving a good score.

But simply having it is not enough.

You need to use your credit card regularly and pay off the balance in full every month.

That way, you show you can handle debt responsibly. Plus, this will keep your credit utilization low.

Credit bureaus update your information every month, so each payment matters.

You might also want to check when they’re updating your report and pay before that.

3. Apply for a Credit Builder Loan

How to build credit fast?

Here’s another way—get a credit builder loan.

It is designed for people with a bad or no credit history. With it, you can improve your score in as little as six months.

Unlike regular credits, this one doesn’t give you access to the money upfront. Instead, you make monthly payments, which are deposited into a savings account.

You get the funds at the end of the agreed-upon period. The benefit for your credit score is enormous if you’re paying regularly.

Plus, it boosts your savings and teaches you how to budget.

How Long Does It Take To Raise Your Credit Score

Typically, it takes about six to eight months to see a real change in your credit score.

This is because your credit history, positive and negative, stays on your credit report for seven years.

Although the impact of, say, late payments and defaulted accounts decreases over time, changes happen gradually and slowly.

While there are some strategies that give fast results, building a positive credit history takes time.

Wrap Up

Your credit score impacts your ability to borrow money for a home or a car.

It might even affect your insurance rates and job prospects.

That’s why it’s so important to have a good score.

And if you've messed it up, don't worry. There are ways to fix that.

Read our tips above and learn how to raise your credit score fast.

Aleksandra Yosifova
Aleksandra Yosifova

With an eye for research, Aleksandra is determined to always get to the bottom of things. If there’s a glitch in the system, she’ll find it and make sure you know about it.