8 Ways to Improve Your Credit Score

The credit score.

It may be confusing and even a little mysterious, but one thing’s for sure – knowing how to improve your credit score is important. Before we get into tips for improving your score, let’s talk about what a credit score is exactly.

A credit score is a three-digit number (ranging from 300 on the low end to 850 at the top) that sums up your credit history rating. Your credit score also determines if you’ll be approved for loans and the interest rates you’ll be offered. You can think of it like a report card on your credit and payment history.

What’s interesting (and perhaps stressful for some) is that your credit score is always changing. As information is added, changed, or removed from your credit report, your score will change.

 Learn more about how your credit score is calculated.

Raising your credit score requires time, consistency, and patience, but it can be done.

These eight steps can push your score in the right direction:

1. Check your credit report regularly to see if the information is correct. There are many online options that allow you to check your own credit using a “soft inquiry” that won’t impact your credit. You can check your FICO credit score using our mobile app and check your credit report at www.annualcreditreport.com.

 Watch a step-by-step video on how to check your credit report and what each section of the credit report means.

2. Find and pay delinquent payments. Once you have your credit report in hand, check to see if any delinquent payments are listed. Call each collector, and pay off the bill.

3. Pay your bills on time, especially mortgage or rent payments. If you discover that you’ve missed any payments, get current, and stay current.

4. Keep balances low on credit cards. A good rule of thumb is to keep account balances below 30% of your available credit. That means if you have a $10,000 credit limit, you should keep your balance below $3,000.

5. Pay off debt rather than moving it around. If you need help with a plan, here are some strategies for getting out of debt to consider.

6. Pay more than the minimum required on your credit card. Large credit card balances hurt your score.

7. Apply for and open new credit accounts only as needed. Don't open accounts just to have a better credit mix. It probably won't raise your score. Avoid impulsive credit applications, especially those store credit cards. While they may offer in-store rewards they often have higher than average interest rates.

8. Be patient. Consistent payments over time will help you rebuild your credit score. It won’t happen overnight, but with time and consistency, you’ll see improvement.

 If you’re building your credit from scratch, the best way to build your credit is to open a credit card with a small limit, and pay off the entire amount each month. This gives you a consistent payment for your credit score while allowing you to pay no interest. It’s a win-win!

Not only will following these eight tips help your credit score rise over time, but you'll also be managing your credit wisely on your journey to financial success.