Bills Logo

How to Raise Your Credit Score For Free

Get rid of your debt faster with debt relief

Choose your debt amount

See if you qualify

Or speak to a debt consultant  844-731-0836

Mark Cappel
UpdatedJul 1, 2010
Key Takeaways:
  • Learn what steps to take to improve your credit score.
  • Examine how your credit score is determined.
  • Consider an FHA loan, when your credit is not good.

I do not understand why my credit score is 546. How do I raise my credit score for free?

I'm so confused and need to raise my 546 score but not sure how. I pay my mortgage on time maybe 1 time late in 12 months but I have old credit cards that are on my report that i paid off and I have 2 cell phone charge offs well it looks like 5 b/c they're charges I thought I paid. anyway, I wanna refinance my mortgage and Home Equity Loan (HEL is 1 month late now) I want cash out too but how do I get the refinance with a low score and how did I get the home and my vehicle, 1st refinance and home equity loan in the 1st place if my score was never higher than 600? and how do i raise my score w/o spending money?

Thank you for your question about your desire to improve your credit score.

The good news is you do not need to spend any extra money to raise your credit score. In other words, you can raise your credit score for free. The bad news is that you need to spend the money you have wisely. You can make improving your 546 credit score as easy or as difficult as you want it to be -- it is entirely up to you and your behavior. Here is the key: Make all of your payments on time and your credit score will go through the roof.

Even being late once on a payment for a credit card or mortgage will ding your FICO score. Making payments late consistently will harm your FICO score and bring it down into the 500s. has answered variations on your question for a reader with a FICO score of 580 and a reader with a FICO score of 460. The scores vary but the steps to raise a credit score for free are the same.

Improve Credit Score has written numerous articles on how debt affects your credit score and how to increase your score. In addition to paying your existing tradelines on time, here are four steps to improve a credit rating:

  1. Pay off all debts and keep revolving lines below 25% utilization. Do not "max out" any loans or cards.
  2. Diversify you credit portfolio. If, for example, you have only a Visa, MasterCard, or Discover card, get a department store credit card or card from a gasoline retailer. Make your payments every month. Leave a small balance every once in a while to show that you are able to handle debt on more than one account.
  3. Keep your oldest credit account active. Remember point number three "Length of positive credit history" discussed above.
  4. Pull your credit report and contest any inaccurate information so that it can be corrected by the credit bureaus. Go to the debt self-help center for sample dispute letters. The credit bureaus must follow the rules set forth by Congress in the Fair Credit Reporting Act (FCRA).

If you would like to learn more about credit reports, credit scoring, and what it means to you, I encourage you to explore the wealth of material offered by the credit information page.

Refinancing With Low FICO Score

You mentioned wanting to refinance your mortgage. wrote an article about refinancing with a 520 FICO score.

The following three factors affect whether you will qualify for or refinance a mortgage:

1. Loan to value: This is calculation looking at how much you want to borrow, relative to the value of the home. It is directly impacted by the amount of money that you can put down on your new home. The larger the down payment, relative to the value of the home, the less risk the lender has to take in extending to you a loan.

2. Debt to Income: This ratio looks at your monthly debt obligations (payments of interest and principal) as a percentage of your monthly income. If you have a significant amount of debt, your debt service burden may be too high for a lender to comfortably give you a loan. You need to either increase your income, or cut your debts.

3. Credit Rating: Your loan, including terms like interest rate and points, will depend on your credit worthiness. One measure of credit quality is a credit score (sometimes a specific FICO score). Your credit rating is calculated based on several variables, including: your payment history (do you have any late payments, charge-offs, and so on), the amount and type of debt that you owe, if you have maxed out any of your trade lines, and then several other secondary factors like the length of your credit history and how many recent inquiries have been made to look at your credit history. If you have a good credit score, you will get a better loan.

Unsure how to handle your debt? Let the Debt Coach tool give you a customized report on your debt resolution options. It’s free!


The best way to improve your credit score is to make your payments on time. Since you were late on your home equity loan, that will negatively impact your credit score and potentially affect your chances of refinancing your mortgage. Talk to a mortgage broker or your current loan servicer and determine what your options are. Keep in mind that an FHA mortgage is often an ideal choice for someone whose credit is not good.

I hope this information helps you Find. Learn & Save.




ppearl, Jul, 2011
Question, I applied for a equity loan today and found out that my old cell company had me down for a outstanding balance, my new carrier was suppose to have paid them and never did, the bank told me to dispute, so i did now what? do i pay this and if i do how long before they fix this on my report, have no clue.
BBill, Jul, 2011
Please see the resource Credit Report Dispute, which outlines how to dispute an erroneous derogatory on a consumer's credit report. This resource includes information on timing, which is set forth in a federal law called the FCRA. Ask any follow-up questions you may have on the page I just mentioned.