It can be really hard to raise your credit score quickly enough to secure a loan. It will be even more difficult if you are young and have a short credit history. While you cannot expect any changes to happen overnight to your credit, you can start taking positive steps today to build a better credit history. Follow these tips to improve your credit score and secure a loan.

Remember always to pay on time, even if you can only afford to make the minimum payment. One late payment can significantly lower your credit score.

Be sure to keep credit cards open. When you close a credit card, your score takes a hit because it appears you have lost a great deal of credit.

Consider opening a personal loan. While you will have to pay some interest on this new loan, you can use it to diversify your credit report and to prove that you can make payments on time. Choose a lender that provides loans to those with bad credit.+

When you open a secured credit card, you will deposit money that will be used as your credit limit. Therefore, this method is safe for you and your creditor and can significantly improve your credit score.

Finally, if you have a parent or spouse willing to add you to a credit card, you can become an authorized user. You can also consider being a cosigner for a loan. Either of these options will allow information to be posted to your credit report.

If you follow each of these tips faithfully, you should expect to see some good changes to your credit history within six months. The longer you practice good habits with your credit, the better your history will be. Use your free annual credit checks wisely, and you can keep a close eye on your score without having to shell out cash to answer your questions. Also, check with your credit cards, as many now offer free FICO credit scores on monthly bills.

Expert reveals five simple steps to improve your credit score overnight

Credit scores are a fact of life we all have to confront sooner or later. They rise and fall according to our decisions, often before we even understand what credit is and what affects it.

Moreover, credit scores are inscrutable. Credit tracking agencies keep the specifics of their algorithms a secret. Many people don’t even know that Equifax, Experian, and TransUnion are not the exclusive authorities on credit. There are dozens of credit reporting agencies. They track and weigh aspects of credit differently, so your score across them will be different.

Yet, despite all of this mystery, credit scores are a critical deciding factor for everything from your ability to buy a car to your chances of getting a mortgage. A lower score can tangibly harm your life and lifestyle, and you may never quite know why or even realize it’s happening.

Credit expert Shaun Connell from Credit Building Tips reveals five tangible actions to improve your credit score quickly.

#1: Keep Credit Utilization Low

Your credit score is, in part, a measurement of how reliable you are at paying off the money you borrow. This score applies whether you’re getting a massive 30-year mortgage or buying $50 worth of groceries on your credit card. You borrow money, and you pay that money back regularly and on time.

One aspect of credit that hugely factors into your score is utilization. Credit utilization is the amount of your total credit that you use. Utilization accounts for as much as a third of your credit score, so keeping your utilization low can be a considerable boost.

Your target number is around 30% or lower, and there are a few ways to get there. You should aim to keep your total running balance across all of your cards – avoid borrowing too much whenever possible so that your cards are appropriately balanced. Getting and keeping your utilization under 30% is a surefire way to boost your score.

#2: Increase Your Credit Limits

Millions of Americans live paycheck to paycheck and don’t have the luxury of quickly paying down debt.

Luckily, you can approach the problem from the other side as well. Consider asking your financial institutions for a higher credit limit. If your account is in good standing – that is, no late payments – they may be more than happy to raise your limits. Increasing limits will lower your percentage utilized and can be helpful to your score – as long as you don’t rack up even more debt.

Most of the time, asking for a higher credit limit is as simple as calling your credit card or bank and talking to customer service. As long as your account is in good standing – even if you’re already carrying a balance – many institutions will be more than happy to increase your limit for you.

Banks want you to have a higher limit when you’ve proven you can pay it off because then you’ll be more likely to carry a higher balance and thus rack up even more interest for them to earn off your spending.

The key here is to ask for a higher limit but treat your spending as if you didn’t have that higher limit. That way, you keep your utilization low and carry as small a balance as possible. This strategy is great because it can boost your score, but it also helps you by keeping your monthly payments small and your interest low.

#3: Avoid Closing Old Accounts

Another factor that goes into your credit score is the overall age of your credit history. The older your credit history, the more experience you have with managing your money appropriately, so the better off you’ll be.

The trick here is that you have to keep old accounts active. You can’t open a credit card and never use it.

Generally, we advise setting up auto-pay on a bill or two and then forgetting about it. Even something as simple as a Netflix subscription can be enough to keep your line of credit active with relatively little risk of ever boosting utilization too high or otherwise breaking the pattern.

#4: Check and Challenge Credit Errors

Banks are not infallible. They can make errors. Payments – especially payments by check or mail – can slip through the cracks. Reports can get mixed up.

Federal law requires that each of the three main credit reporting bureaus – Equifax, Experian, and TransUnion – provide a full credit report to everyone upon request, for free, once a year. Once a year, at minimum, you want to request your credit report and look for errors.

What kind of errors might you find?

• Late payments when you know you haven’t missed a payment.
• Information that isn’t yours, like a line of credit you didn’t open.
• Clerical errors from debt furnishers are erroneously reporting debt you don’t owe.
• You may find old debt that should age out but has been refreshed to keep it on your report.

Essentially, you can dispute anything inaccurate, fraudulent, or false. How do you do it?

Start by creating a list of all the errors you find, so you can track what you challenge, when, and when it’s removed. You want to maintain proof in case any of it reappears.

Next, gather any supporting evidence you can to challenge the errors—for example, payment and transaction history may show zero late fees to contest a late payment report.

At this point, you want to write a Credit Challenge Letter. This letter is a formal statement to the credit bureau that you are challenging a line on your credit report as inaccurate and why. 

#5: Get Credit for Uncredited Payments

Your credit score generally only keeps track of things like loans, credit cards, and other significant financial transactions.

A lot of your basic, everyday transactions aren’t counted.

What falls into this category?

• Regular payments to streaming services.
• Fees for monthly entertainment accounts.
• Rent payments.
• Expenses to utility companies like water, gas, trash, and power.

These are regular monthly payments that you pay on time (obviously, or else your service is canceled) and should count toward your credit score. You might even notice that mortgage payments are counted, but rent payments aren’t. The problem here is that the lender has to pay to submit the information to the credit bureaus to get those sorts of transactions reported. Your landlord or utility company doesn’t want to spend this extra fee, partly because it doesn’t help them in any way, so you’re left with all of these regular payments that don’t go on your report and don’t help you.

Luckily, there are a few ways you can get these reported.

• Rent Reporting Services are services you can pay the fee to have the data reported. They generally cost between $50 to $100 to set up and $10 per month afterward to keep reporting the information.
• Extra Credit, a service from Credit.com, seeks out many forms of regular payment to consider and report.
• Experian Boost is a service from Experian that adds additional regular payment systems to your credit score, though it only works for one bureau.

Additionally, newer versions of FICO (your credit score) take these other channels into account and are slowly gaining popularity.

How Much Will Your Score Rise?

Considering the above tips, how much can you raise your score? The truth is that it varies.

Some of these steps can have a near-instant effect, and you’ll see a bump in your score within a month or less. Others might be more long-term since credit scores are slow to change, even in the best times.

Luckily, you don’t need a perfect score. Getting your score above 750 can get you slightly lower interest rates or better loan terms, but the most significant benefit is bringing your score from under 500 to over 600. In practical terms, anything above 650 is good enough for most people.