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How To Improve and Maintain Your Credit Score

Reading Time: 4 minutes

Your credit score is a critical financial indicator that lenders, landlords, and even potential employers may use to assess your creditworthiness. A strong credit score can open doors to favorable interest rates on loans, better rental opportunities, and more. On the other hand, a low credit score can lead to higher interest rates and financial obstacles. Fortunately, you have the power to improve and maintain your credit score with some strategic financial moves and responsible habits. But, before you can improve your credit score, you need a good understanding of how it works.

Understanding Your Credit Score

Credit scores are numerical representations of your creditworthiness, typically ranging from 300 to 850. The higher your score, the more financially reliable you appear to lenders. Several credit scoring models exist, with FICO® and VantageScore® being the most widely used. 

These models consider various factors to calculate your score:

  • Payment History (35%): This is the most significant factor in your credit score. It tracks your history of paying bills on time, including credit cards, loans, and other debts. Late payments can significantly damage your score.
  • Credit Utilization (30%): This measures how much of your available credit you’re using. Aim to keep your credit utilization below 30% to maintain a healthy score.
  • Length of Credit History (15%): The longer your credit history, the better. Avoid closing old credit accounts, as they contribute positively to your score.
  • Credit Mix (10%): A diverse mix of credit accounts, such as credit cards, installment loans, and mortgages, can positively impact your score.
  • New Credit Inquiries (10%): Opening several new credit accounts within a short period can indicate financial stress and lower your score.

How To Improve Your Credit Score

1. Check Your Credit Reports Regularly

Start by obtaining free copies of your credit reports from the three major credit bureaus: Equifax, Experian, and TransUnion. You can access these reports once a year through Review your reports for errors, such as incorrect account information or late payments. Dispute any inaccuracies you find.

2. Pay Your Bills on Time

Your payment history significantly impacts your credit score. Ensure you make all payments on time, including credit cards, loans, and utility bills. Set up reminders or automatic payments to avoid missed deadlines.

3. Reduce Credit Card Balances

High credit card balances relative to your credit limit can harm your credit score. Aim to keep your credit utilization below 30%. Pay down existing credit card debt, starting with accounts that carry the highest interest rates.

4. Avoid Opening Too Many New Accounts

Frequent credit inquiries can negatively affect your credit score. Apply for new credit only when necessary, and be cautious about opening multiple accounts in a short time.

5. Don’t Close Old Accounts

Closing old credit accounts can shorten your credit history, potentially lowering your score. Keep older accounts open, even if you don’t use them regularly.

6. Establish a Mix of Credit

Having a diverse mix of credit accounts, such as credit cards, personal loans, and installment loans, can positively influence your credit score. However, don’t open new accounts solely for this purpose; only do so if it aligns with your financial goals.

How To Maintain A Good Credit Score

Maintaining a good credit score involves responsible financial habits that you should continue even after improving your score. Here are some key strategies:

1. Monitor Your Credit Regularly

Stay vigilant by regularly checking your credit reports for errors or signs of identity theft. You can subscribe to credit monitoring services that provide real-time updates on changes to your credit report.

2. Set Up Payment Reminders

Even if you’ve never missed a payment, setting up reminders ensures you won’t accidentally forget. You can use calendar alerts, mobile apps, or your bank’s automatic payment options.

3. Avoid Maxing Out Credit Cards

Continuously using all of your available credit can raise red flags to creditors. Aim to keep your credit card balances well below your credit limits.

4. Be Cautious with New Credit Applications

Every time you apply for credit, a hard inquiry is made on your credit report. While a few inquiries are normal, multiple inquiries within a short period can lower your score.

5. Be Mindful of Closing Accounts

Before closing a credit account, consider its potential impact on your credit score. If the account is old and in good standing, it’s generally beneficial to keep it open.

6. Manage Credit Wisely

Don’t let credit become a tool for overspending. Use it responsibly, and only borrow what you can afford to pay back.

Additional Tips for Improving Your Credit

Negotiate with Creditors

If you’re struggling to make payments, contact your creditors to discuss potential options, such as reducing interest rates or establishing a payment plan.

Consider a Secured Credit Card

If you have a limited or poor credit history, a secured credit card can help you build or rebuild credit. Secured cards require a cash deposit as collateral, reducing the risk for the issuer.

Become an Authorized User

Ask a family member or friend with a good credit history if you can be added as an authorized user on their credit card. This can help improve your credit score by including their positive payment history on your credit report.


David has been a licensed life insurance agent since 2004. In addition to life insurance design and sales, he has also helped develop educational and marketing content for large financial firms like Allstate, New York Life, State Farm, AmTrust, and J.G. Wentworth. His articles and essays on life insurance and Human Life Value are currently taught at California State University (CSU) as part of its Expository Writing and Reading Course, and his articles on budgeting, life insurance, investing, and financial planning have been featured in online publications like ThinkAdvisorThe Huffington PostNuWire Investor, and RealClearMarkets. David is also the author of several short eBooks on budgeting and saving money, and the designer of the xFlow™ budgeting app and the xCalc™ suite of financial calculators.

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