How to Increase Your Credit Score from 500 to 750
Disclaimer: If there’s ever been a time that disclaimer applies to a financial article, this is it. Individual circumstances vary significantly based on where you start, what your reports look like, and dozens of other factors.
This guide covers general steps and strategies that will improve most people’s credit scores over time. It is intended as a starting point for your personal credit journey. For professional advice about your specific situation, see the bottom of this article for resources.
A bad credit score keeps you from qualifying for loans you want. Low scores even affect the interest rates you pay on credit cards you’re approved for and whether you’ll be able to rent an apartment. But here’s the good news. Unlike your bank account balance or job, your credit score isn’t a permanent life situation. It’s the snapshot result of a mathematical formula applied to your credit data at a given moment. And since that data can change, your score can too.
The key word there is change. Credit scores won’t magically get better on their own. They improve when you take specific actions over time. Here’s how to actually do it.
Table of Contents
● Learn what’s bringing your score down
● Phase 1: Stop any new damage (1–3 months)
● Phase 2: Dispute inaccuracies (1–2 months, can overlap Phase 1)
● Phase 3: Lower your credit utilization ratio (2–6 months)
● Phase 4: Begin establishing positive payment history (3–12+ months)
● Phase 5: Strategically address negative items (ongoing, starts month 3, lasts 3–36 months)
● How long will it take?
● Don’t make these mistakes while rebuilding credit
● You’re finally done rebuilding! Now just keep doing what you’ve been doing.
● Why is this guide different than others you’ve seen?
● Frequently asked questions
Learn What's Bringing Your Score Down
You need to understand what’s having the negative impact on your credit scores. There are several reasons why your score could be below 600.
Common reasons include:
● Late payments
● Accounts in collections
● Maxed out credit cards
● Too many hard inquiries
● Thin credit file
Once you know what specifically is causing your score to be low, you can come up with a plan to correct the issues.
Pull your credit reports and review them
To see what’s impacting your credit score you’ll need to pull your credit reports from all three credit bureaus: Experian, Equifax, and TransUnion. You can pull all three reports for free once a year at AnnualCreditReport.com. Review each of your credit reports carefully and note any discrepancies.
Why your credit score may be below 600
Late payments
If you have any accounts that are past due your score will suffer. Payment history is the most heavily weighed factor used to calculate your credit score. Having a late payment can drop your score 100+ points overnight.
If you’re wondering how long negative information stays on your credit report check out this guide.
Collections
If you have any account balances that have been sent to collections your score will be lower. Collection accounts are serious delinquencies that stay on your credit report for up to seven years.
Unpaid credit card balances
Having high balances on your credit cards can negatively affect your credit score as well. Lenders want to see you’re not maxed out on your credit cards. The lower your credit utilization the better your score will be.
Hard inquiries
Every time you apply for credit a hard inquiry is added to your credit report. If you have applied for multiple credit cards or loans within a short period of time your score could be lower because of these inquiries.
Thin file
If you don’t have enough credit history your score could be below 600. If you’re just starting to build your credit you may have a thin file. A thin file happens when you don’t have enough credit history for the credit bureaus to calculate a credit score.
Phase 1: Stop Damaging Your Score Further (1–3 Months)
The first step to getting your credit score under control is to stop the bleeding. You need to make sure that no further damage is done to your credit score while you’re trying to fix it.
Bring all past due accounts current
The first thing you need to do is get all of your past due accounts up to date. The longer an account is past due, the more it will hurt your credit score.
Set up automatic payments
Next, you’ll want to put all of your credit cards and loans on auto-pay. By setting up automatic payments, you ensure that you don’t miss any future payments.
Stop applying for new credit
The last thing you want to do while you’re working on repairing your credit is to apply for new credit.
Take inventory
Create a list of all your debts including the account type, current status, balance, minimum payment, and any late payments.
Phase 2: Correct Any Errors on Your Credit Report (1–2 Months)
The next step is to dispute any errors on your credit reports. Many times credit bureaus will add incorrect information to your credit reports.
Common errors include:
● Accounts that don’t belong to you
● Late payments that were actually paid on time
● Incorrect account balances
● Accounts shown as open that you closed
● Duplicate accounts
● Collections older than seven years
● Bankruptcies not marked as satisfied
Disputing errors on your credit report
Go to each credit bureau’s website and file a dispute. Provide copies of any documentation you have that proves what the correct information should be.
The credit bureaus have 30 days to investigate your dispute and correct any mistakes.
What happens if your dispute is denied?
There are only certain things that you can dispute on your credit report. You can’t dispute negative items that are actually correct.
Phase 3: Pay Down Your Balances (2–6 Months)
Once you have corrected any mistakes on your credit reports it’s time to lower your credit utilization ratio.
To calculate your credit utilization ratio divide your total credit card balances by your total credit card limits.
You want to keep your credit utilization ratio under 30%.
Ideally, keep it under 10%.
When does your credit card issuer report utilization?
Credit card issuers typically report your credit utilization at the end of your billing cycle.
Phase 4: Begin Establishing Positive Credit History (3–12+ Months)
After you have stopped the bleeding and lowered your credit utilization ratio it’s time to start building positive credit history.
Secured credit cards
Secured credit cards are designed for people with bad credit or no credit history.
Once approved, make small purchases and pay the balance in full every month.
Become an authorized user
If you have a family member with excellent credit, becoming an authorized user may help strengthen your credit history.
Get a credit builder loan
Credit builder loans are offered by credit unions and some banks.
How credit builder loans work
The lender deposits the loan into a savings account while you make monthly payments. Once paid off, you receive the money.
Phase 5: Strategically Take Care of Negative Items (Month 3–36)
Do I need to pay off collections?
Whether you should depends on the scoring model your lender uses.
Try a pay for delete
Ask the collection agency to remove the collection account in exchange for payment.
Send a goodwill letter
If the negative mark resulted from an unusual hardship, politely request that the creditor remove it as a goodwill gesture.
How Long Will It Take to Raise Your Credit Score?
Months 1–3
You may see a 20–40 point increase.
Months 3–6
Many people improve 40–80 points.
Months 6–12
Positive payment history continues building and gains of 80–120 points are possible.
Months 12–24
Another 20–40 point improvement is common.
Months 24–36
Many consumers who started around 500 can reach 700+ during this period.
The important thing to remember is that improving your credit score takes consistency and patience.
Common Mistakes People Make When Rebuilding Credit
Closing old credit card accounts
Keep older accounts open whenever possible.
Using a credit repair company
You can dispute legitimate errors yourself for free.
Applying for too many credit cards
Too many hard inquiries can lower your score.
Only making minimum payments
Pay balances down aggressively whenever possible.
Thinking you'll see results immediately
Credit improvement is measured in months not days.
Keeping Your Credit Score High
Always pay on time
Set up automatic payments.
Keep your credit utilization low
Aim for less than 30%, ideally under 10%.
Don't open too many new accounts at once
Limit unnecessary credit applications.
Monitor your credit reports
Review them at least annually.
Don't close old credit card accounts
Older accounts strengthen your credit history.
You Did It!
Congratulations you just learned how to improve your credit score from 500 to 750. Just remember that knowledge is power. If you know how your credit score is calculated, you have the power to change it.
Additional Resources
If you want someone to review your credit reports and make sure they don’t have any errors you should consider signing up for Credit Saint.
Credit Saint will pull your credit reports and analyze them for free. If errors are found, they can help you dispute them.
Bottom Line
Whether you decide to sign up for Credit Saint or not, knowing how to improve your credit score from 500 to 750 will help you reach your financial goals.