6 Ways to Improve Your Credit Score

A good credit score is essential.

A good credit score is essential for achieving your financial goals, whether you’re applying for a loan, renting an apartment, or needing a new credit card. Improving your credit score may take time, but there are actionable steps you can take to boost it.

1. Pay Your Bills on Time: Your payment history is one of the most important factors affecting your credit score. Paying your bills on time, including credit cards, mortgages, and other loans, will help maintain a positive payment history.
2. Reduce Your Credit Card Balances: Credit utilization—the percentage of your available credit that you’re using—has a major impact on your score. Aim to keep your credit card balances below 30% of your available credit limit.
3. Check Your Credit Report for Errors: Mistakes on your credit report can lower your score. Regularly review your credit report for inaccuracies and dispute any errors you find with the credit bureaus.
4. New Credit Accounts: Each time you apply for credit, it can result in a hard inquiry, which can lower your score temporarily. Only open new accounts when necessary and avoid unnecessary credit inquiries.
5. Keep Accounts Open: The length of your credit history is another factor in your score. Keeping older accounts open, even if you don’t use them often, can positively impact your score.
6. Settle Outstanding Debts: If you have any unpaid debts, work with creditors to set up payment plans or consider debt settlement options. Resolving outstanding debts can improve your credit over time.

Check out our other Credit Education resources.