3 effective ways to elevate your credit score in 30 days

Like many worthwhile pursuits, establishing a strong credit score takes time. However, if you think your dreams of a new car or an exciting travel rewards card are out of reach, reconsider. Improving your credit score might not require as much time as you fear.

To enhance your credit score, begin with these three strategies. Depending on your current score, you might notice an increase in just 30 days.

Prioritize utilization

While on-time payments are often highlighted when discussing credit scores — and rightly so — there's another crucial factor you should pay attention to: credit utilization. This aspect actually accounts for 30% of your overall credit score.

"Credit utilization" describes the percentage of your credit limits currently being utilized across your credit card accounts. For example, if you have a credit card with a $10,000 limit and a $5,000 balance, that account is 50% utilized (meaning you're using half of your available credit).

Lower utilization ratios positively impact your credit score. As you draw more from your available credit and your utilization ratios increase, it can adversely affect your credit score.

You can reduce your credit utilization in two ways:

Reduce your credit card balances

This action boosts the amount of available credit on your account. In the earlier example of a $10,000 card with a $5,000 balance at 50% utilization, if you reduce the balance to $2,500, your new credit utilization rate would drop to 25% once the account reflects the update on your credit report.

Request a credit limit increase

A credit limit increase can also assist in lowering your credit utilization ratio. For instance, if you can currently only reduce your $5,000 card balance to $4,000, but your card issuer raises your limit to $16,000, these changes will result in a credit utilization rate of 25%.

Correct inaccuracies on your credit report

Credit bureaus strive to maintain the accuracy of the information on your reports, but errors can happen. A study by the Federal Trade Commission revealed that 5% of consumers had inaccuracies on at least one of their credit reports from Equifax, TransUnion, or Experian.

While not every mistake will devastate your credit score, many inaccuracies in credit reporting can inflict significant harm. This is particularly true for negative entries such as late payments and collections.

Regularly review all three of your credit reports. If you spot any inaccuracies, the Fair Credit Reporting Act allows you to dispute those errors with the credit bureaus. If a negative item is successfully removed, your credit score is likely to improve once the mistake is corrected.

Become an authorized user

Your credit score can improve with the help of someone else's positive credit history. When a family member adds you as an authorized user on their credit card, that account usually appears on your credit reports within a few months.

If a relative has consistently made on-time payments and maintains a low credit utilization rate, they can contribute to enhancing your credit score. Additionally, if their account has been open for a while, it may also help increase the average age of your credit accounts, which can further benefit your scores.

Bottom line

To build and maintain excellent credit scores, it's essential to adopt responsible credit management practices over time. This simply means making timely payments and not charging more on your credit card than you can pay off each month. The earlier you establish these positive habits, the sooner you'll notice an improvement in your credit score.