How to Improve Your Credit Score

so that we can help make handling your personal finances a whole lot easier.

How to Improve Your Credit Score


At some point in your life you may want to borrow some money. Maybe it will be to buy a new car, or a new house. The reasons will be different for each of us, but having healthy credit makes borrowing easier and cheaper.

  • Your credit score determines how much you can borrow. And how much it will cost you to borrow.
  • Credit scores range from 300 to 850.
  • A good score is over 700, making borrowing easier and less costly.

If you want to improve your credit score, there are simple ways to do that.

Below you’ll see how your credit score is created, and tips alongside that will help improve your score. You don’t have to do all of the tips at once. Just start with one, today.

Five ways your credit score is created and tips to raise your score.

  1. Your payment history.
    This looks at if you pay your bills on time.
    TIP: Always pay the minimum payment due on time. Signing up for automatic/electronic payments can make this easier to remember.
  2. Your credit utilization ratio.
    This measures how much credit you use compared to your credit limit.
    TIP: Use less than 30% of your total credit limit – across all your cards. If you use more, your credit score may be lowered.
  3. Your length of credit history.
    This basically means the longer you’ve been paying on time the better.
    TIP: Instead of cancelling old credit cards, consider keeping them open and active, without using them every day. To do this, try setting up a small automatic reoccurring charge that you can easily pay off each month.
  4. Your credit mix.
    This looks at what kinds of credit you use: installment (has an end date, think loans) or revolving (has no end date, think credit cards). 
    TIP: Don’t worry if you don’t have a mix of these accounts today. Installment accounts likely come with time as you purchase larger items, like a car or a home. 
  5. Credit inquiries.
    This looks at how often you are applying for new credit.
    TIP: Don’t apply for, or close, several credit accounts in a short period of time. Doing so can ding your credit score.
Now that you’ve gotten a good idea of what a credit score is and how you can keep it healthy, check out the article "So long, debt" for tips on how to keep your financial foundation strong.