How to Increase a Credit Score: 5 Tips

If you're having problems getting a credit card or mortgage, then you probably need to figure out how to increase a credit score. Here are the five most effective ways to do so.

May 25, 2014 at 3:00PM


While I hate to say it, credit scores have become an increasingly central part of our lives. Banks check them. Employers do. Your score dictates whether you can finance a car or house. And even online dating services take them into consideration.

But fear not. If you have a low credit score, it's actually easier than you think to improve it. The key is to know how they're calculated. If you can determine this, then all you have to do is work backward to a solution.

How credit scores are determined
While credit scores have gotten a bad name -- and, in many cases, deservedly so -- they actually serve a positive and important function. That is, they provide information to creditors about whether a person is likely to repay his or her debts.

With this in mind, it should come as no surprise that one's credit score is a function of multiple behaviors weighing on financial responsibility. More specifically, as I highlight in the preceding presentation, the major credit bureaus take five factors into consideration (the weight of each is given in parenthesis):

  • Past payment history (35%).
  • Amount of money currently owed on all credit accounts (30%).
  • Length of credit history (15%).
  • Types of credit used -- i.e., revolving vs. installment (10%).
  • New credit accounts and inquiries (10%).

Not to belabor the point, but this is an extremely important list. Not only does it tell you specifically how the credit bureaus assess your creditworthiness, but it also discloses the relative importance of each factor.

For instance, let's assume that you're trying to improve your credit. How would you go about doing so? The correct answer is that you'd attack each of these five items in order of their importance. In other words, you'd prioritize.

The most important issue to remedy is late payments. Next is your outstanding debt load, followed by the length of your credit history, and so on. It's only by proceeding in this order that you can tackle the problem in the quickest and most efficient manner.

How to increase a credit score
Now, just to be clear, the point here is not to lecture. It's rather to empower. Make no mistake about it; everybody in this world has problems. And many people only wish their biggest challenge was a low credit score.

As a result, if you're struggling with a disappointing credit score, then keep this in mind: Improving it is an extremely surmountable challenge. By approaching it in a disciplined and systematic manner, you'll be surprised at how quickly you can put a bad score in the rearview mirror.

How to get even more income during retirement
Social Security plays a key role in your financial security, but it's not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers