Improving your credit score

Quick answer: It’s important to have the best credit score you can. It may make borrowing money cheaper, and can even impact your ability to get a place to live. The best way to improve credit is to manage it responsibly over time, paying your bills on time and only applying for credit when you need it.

What may improve your credit score

  • Checking your credit report and correcting any errors.
  • Consistently paying your bills on time. You may want to set up payment reminders or online bill pay to help you pay your bills on time.
  • Paying down what you owe.
  • Keeping credit card balances low. How much credit you have available is an important scoring factor, so keep balances as far below your credit limit as possible.
  • Only applying for and opening new credit accounts when they’re absolutely necessary.
  • Having a mix of credit cards (revolving credit) and loans (installment credit).

What may lower your credit score

  • Paying some bills late
  • Having credit cards balances near your maximum spending limit
  • Applying for new credit cards frequently, whether you need them or not
  • Having a very brief credit history
  • Exceeding your credit card spending limit
  • Closing accounts that have been open the longest

Improving your credit score takes time. It is really about forming good payment habits and building a consistent credit history.

If you are working on your credit you may want to consider a secured credit card. These cards require a security deposit equal to the credit line. Unlike prepaid cards, payments and activity will be reported to the major credit bureaus.