How to build your credit score

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You’ve seen all the commercials that talk about needing a better credit score. But none of them seem to outline exactly which steps you take to make that happen. Read on for some practical ways you can improve your score and keep it growing. First, let’s look at some of the basic information you need to know about credit scores.

What is a credit score?

A credit score is three numbers, typically between 300 and 850, that are used to show potential lenders how often you pay your bills on time. Many times, lenders will only let you borrow money if your score is above a certain number, or they may require higher monthly loan repayments if your score is on the lower end. The score is determined by your past credit history and payment history.

What is a good credit score?

Credit scores are divided by numbers into five categories:

  • 300-579: Poor
  • 580-669: Fair
  • 670-739: Good
  • 740-799: Very good
  • 800-850: Excellent

You can use your score to determine where your credit rating, which is expressed as a letter grade, will fall.

How can I improve my credit score?

You know what a credit score is, so let’s talk about how you can improve it. Below are nine tips and tricks to help you check your credit score for free, plus the ways you can make your score better.

1. Know your score

There are a few ways you can find out your credit score for free. You can check your credit card or other loan statement—many credit card and auto loan companies now put your score on the statement to allow you to keep up with it. You can also talk to a non-profit counselor who can work with you to find out the info you need. Or you can use a service like Experian to check your score for free once a year, or use a website like, which allows you to access your credit score more often for a fee.

2. Pay your bills

This may seem obvious, but if you want better credit, pay your bills on time. This means everything from your latest electric bill to your monthly car payment. Lack of payment will lower your score, and it can take a long time for those late payments to fall off your record.

3. Leave your credit cards open

If you decided to switch credit card companies, that’s great. Just be sure not to close your old card after paying it off because a closed card can ding your credit score. However, if you’re paying a large annual fee to keep the card open, it may be worth risking a slightly lower score instead of paying tons of money for a card you don’t use.

4. Lower your debt

Easy to say, hard to do, right? But whittling down your debt goes a long way in raising your credit score. Many experts say to start small—pay off your smallest debt first, and then go to the next-smallest, and so on. This will allow you to rid yourself of some debt without draining your bank account.

5. Stop applying for store credit cards

There is nothing wrong with a store credit card, but you do want to be cautious of how many you apply for, and how many times you try to get approved. When you apply for credit of any kind, it has the potential to lower your score, as it is a sign to potential lenders that you need a lot of credit and can’t pay for it all (even if you’re just applying for the card to get the discount).

6. Keep up with your score

We mentioned some resources above that allow you to track your credit score without lowering it. It’s important to know your credit score and if or when it changes. For one thing, you want to know if your hard work is helping your score! You’ll also be able to monitor any potential suspicious activity, like identity theft, by checking on your score more often.

7. Maintain a credit history

While you know you don’t want to open ten credit cards at once, you also don’t want to find yourself with no credit history at all. Lenders want to see a consistent history of paying your bills on time, and having no credit to your name doesn’t show them how reliable you are at repaying loans. Consider opening one credit card and paying it off monthly to build some credit that won’t send you into tons of debt.

8. Dispute credit inaccuracies

Remember how you need to monitor your credit score on a regular basis? One more reason to do this is so you can report and dispute any inaccurate information. It takes seven years to get rid of “bad” credit, so having these problems corrected will make a big difference in upping your score.

9. Consult an expert

There are financial professionals who specialize in understanding and building credit, so if you still don’t know where to start, set up a meeting with one of these pros. You will walk away with some new information about how to build your credit, along with a solid plan for reaching your next credit score goal.

Financial matters aren’t anyone’s favorite topic to discuss, but you have to have a handle on your credit score to give yourself the best chance for financial success. Learn your score today and start taking steps to make that number climb even higher.

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