What action can quickly increase your credit score?

Paying down existing credit card balances is a highly effective way to quickly increase your credit score due to its direct impact on your credit utilization ratio. This ratio measures the amount of credit you’re using compared to your total credit limit. Ideally, keeping this ratio below 30% is recommended; lowering it even further can significantly enhance your creditworthiness in the eyes of lenders.

When you pay down your credit card debt, you effectively lower your credit utilization, which can lead to an immediate improvement in your credit score. Credit scoring models typically favor individuals who manage their credit responsibly, and maintaining lower balances shows that you are using credit wisely.

In contrast, applying for new credit cards can lead to hard inquiries on your credit report, which might temporarily decrease your score. Missing monthly payments negatively affects your credit history and score, as payment history is a key component of credit scoring. Opening a new bank account does not directly influence credit scores, as it does not correlate with how you manage credit.