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  • Writer's pictureSteph Ryan


Updated: Mar 11

Curious what your credit score is, or ways to improve your credit score? Keep reading to find out how to increase your credit score.

ways to increase your credit score

There are several ways to improve your credit score:

  1. Pay your bills on time every month.

  2. Open a credit card. Pay it off monthly to avoid paying interest. If you can’t get approved for a credit card, open a secured credit card.

  3. NEVER MISS A PAYMENT. Your payment history is one of the most important factors in determining your credit score, and having a long history of on time payments can help you achieve an excellent credit score.

  4. Don’t keep opening and closing credit cards. Creditors like to see a long credit history. Only open credit cards you need and you’ll use frequently to build credit. (Avoid opening credit cards that you can only use at one particular store).

  5. NEVER MAX OUT YOUR CREDIT CARDS. Keep credit utilization low. The portion of your credit limit you're using at any given time is called your credit utilization. A good guideline is to use less than 30% of your credit card limit, but lower is better. One of the fastest ways to increase your credit, is lowering your credit utilization ratio. Take your credit card limit and times it by 30% and never have a balance of more than that number, and pay off your balance in full every month to avoid paying interest. Do not charge what you can’t pay back. So if your credit card has a credit limit of $300, then you should NEVER keep a balance of more than $90, otherwise it will hurt your credit score. The higher your credit utilization, the more you’ll be seen as a risk to lenders because they’ll think you’re too reliant on debt.

  6. Ask for a credit limit increase. When your credit limit goes up and your balance stays the same, it instantly lowers your overall credit utilization, which can improve your credit. This also means you’ll be able to keep a higher balance if your credit limit is increased (always pay it off in full each month to avoid paying interest). If your income has gone up or you've added more years of positive credit history, you have a good chance at getting your limit increased. When I opened my first credit card at my bank, I called them every 6 months and asked for a credit limit increase and I asked them to lower my interest rate. I use my credit card to pay for EVERYTHING so that I can earn the cash reward points, and I pay it off each month so I don't pay interest (or I will pay the balance off a few days or a week after I make the purchase). In order to do this, I have had to get multiple credit limit increases which took many years so that I could use my credit card to make purchases without having to worry about going over the 30% credit utilization.

  7. Check your credit report for errors. A mistake on your credit report, could lower your credit score. There are a few websites you can use to check your credit report. Credit Karma is a FREE website you can use to check your credit score. You can also use Annual Credit Report to get a copy of your credit report for FREE. If you find any errors, you can report them here.

  8. Catch up on overdue bills and avoid collection agencies. Contacting your creditors about paying off your debt is a great way to raise your credit score fast. If something goes to collections, contact the original debtor immediately and try to pay it off in full or make payment arrangements with them to avoid it hitting your credit and to avoid further fees and interest from collection agencies. If something goes to collections, and you’re unable to work with the original debtor, and you’re stuck dealing with a collection agency, paying off a collection debt will remove the chance of being sued over the debt, and you may be able to persuade the collection agency to stop reporting the debt once you pay it. Make sure that they agree to remove the negative hit to your credit report if you repay it in full and get it in writing. If this agreement isn’t made, there will likely be no impact to your credit just because you paid it off. After making an agreement with the collections company, request a pay for delete letter to have it removed from your credit report. A pay for delete letter is an agreement in writing stating that the creditor will have the derogatory information removed from your credit report. If you pay off a collection account and you can’t get it removed, don’t freak out. The older the account gets, the less it’ll affect your score and after seven years, it will likely vanish. When you pull your credit report from the free websites listed above, you’ll be able to see which accounts are in collections, which is affecting your credit score.

  9. Report your rent by signing up for RentReporters. Paying rent doesn’t count towards your credit score and it’s not reported on your credit history. You can sign up with RentReporters and they will report your on time payment history to the credit bureaus. There is a one time signup fee of $94.95 and there’s a monthly fee of $9.95. You can check out their website for more information.

  10. Report your utility bills and subscription services for FREE using Experian Boost. Paying your utilities and subscription services doesn’t count towards your credit score and it’s not reported on your credit history. The average Experian Boost user sees a 13 point increase. If you’re eligible for a score boost, you’ll get your new score instantly after you select the relevant payments you want to add to your credit report. I signed up for this and my FICO score went up 13 points. (I linked my Citibank credit card which is the main credit card I use to pay for everything).

  11. Become an authorized user. If you have a significant other or someone you trust with a  good credit score, they can add you as an authorized user on their credit card. This also allows you to make purchases if they choose to give you a credit card. But the primary account holder is the one responsible for payments. And their good credit history with that credit card can help build your credit and boost your score. Plus, there’s generally no credit check or need to apply in order to be an authorized user. Be sure to check with the card issuer to see how they handle reporting authorized users to credit agencies. Certain credit card companies like Capital One will also allow you to add your minor child onto your credit card as an authorized user so that you can start building their credit at an early age (before 18), while teaching them the importance of credit. We do this for our son.

When working on improving your credit score, it’s helpful to know how your score is calculated so you know which factors are the most important. You can then make a plan for where you should start. More than 90% of top lenders use FICO to make credit decisions. Here are the major credit scoring factors and how each one can impact your credit score:

  1. Payment history:

  2. Amount of debt and credit usage:

  3. Age of accounts:

  4. Account mix:

  5. History of credit applications:

Lastly, a credit score and credit history are not the same thing. However both are used as a tool to measure your credit risk, or the likelihood that you'll pay your bills on time. Your credit report is a summary of your credit history, including the type of credit accounts you've had in the past and your payment history. It's important to know that you have more than one credit report. The three main credit bureaus are Equifax, TransUnion and Experian, and all three might have different reported information such as your current credit limits and account balances, as well as certain public records like a bankruptcy. Your credit score is a three digit number. Which is typically between 300 and 850, and it represents your overall credit risk at a glance. A credit score of 700 or above is generally considered good. A score of 800 or above on the same range is considered to be excellent. Your credit scores are calculated using scoring models from the information in your credit report. Your payment history, the amount of debt you owe and the length of your credit history are all factors that contribute to your credit score.

You may think having bad credit or no credit doesn’t matter, but it definitely matters. Not having any credit history isn't necessarily worse than having bad credit, but it's still not great. Think of your credit score like a report card. It tells people how financially responsible you are, and how likely you are to pay people back.

Having a great credit score, means lower interest rates on credit cards, mortgage loans and other loans. You also get better car insurance rates, cellphone contracts and utility hookups without needing a security deposit, easier approval by landlords if you’re renting, job opportunities and more.

There are many benefits to having a credit card when used properly. Only use it if you have the money to pay it off each month so that you avoid paying interest, and earn cash back rewards, while building your credit history. They also offer protection against fraud, and the ability to do a chargeback. A chargeback is used to reverse a payment in the case of a billing error, unauthorized credit card use or failure to deliver a product or service.

Disclaimer: I am not a financial advisor. I will not and cannot be held liable for any actions you take as a result of anything you read here. Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all financial decisions. Any financial decisions made on the basis of any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise.


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