How to Increase your Credit Score

Your credit score is calculated based on several factors, each with a different weight. Knowing these helps you focus on the most impactful changes.

Key Credit Score Components

Payment History (35%) – The biggest factor. Late payments, collections, and bankruptcies hurt your score.
Credit Utilization (30%) – How much of your available credit you’re using. Lower is better.
Length of Credit History (15%) – Older accounts help; closing them can shorten history.
Credit Mix (10%) – Having different types of credit (credit cards, loans, mortgages) can help.
New Credit (10%) – Opening too many accounts in a short time can lower your score.

Common Myths Debunked

❌ Checking your own credit lowers your score. (False—soft inquiries don’t hurt.)

❌ Closing old credit cards helps your score. (False—it can shorten credit history and increase utilization.)

❌ You only have one credit score. (False—lenders use different models like FICO® and VantageScore®.)

Action Step: Get your free credit report from AnnualCreditReport.com and review it for errors.

A single late payment can drop your score by 50-100+ points, and it stays on your report for 7 years.

How to Never Miss a Payment

Set up autopay for at least the minimum payment.
Use calendar reminders for due dates.
Contact creditors immediately if you foresee a late payment—some offer grace periods.

How to Fix Past Late Payments

Goodwill Letter: Politely ask the creditor to remove the late payment as a courtesy.
Pay-for-Delete Agreement: Negotiate with collections agencies to remove the mark in exchange for payment (get it in writing).
Dispute Errors: If the late payment was reported incorrectly, file a dispute with the credit bureaus.

Pro Tip: Even if a late payment is accurate, its impact fades over time—focus on perfect payment history moving forward.

What Is Credit Utilization?

This is the percentage of your available credit you’re using. For example, if you have a $10,000 limit and a $3,000 balance, your utilization is 30%.

Why It Matters?

High utilization (above 30%) signals risk to lenders and lowers your score. Under 10% is ideal.

How to Lower Utilization Fast

✔ Pay down balances before the statement date (most cards report utilization once a month).

✔ Ask for a credit limit increase (without increasing spending).

✔ Spread spending across multiple cards instead of maxing out one.

✔ Use a balance transfer card (if you have high-interest debt).

Warning: Closing a credit card reduces your available credit, which can spike your utilization—keep old accounts open!

Why Credit Age Matters

A longer credit history improves your score. The average age of your accounts is a factor.

How to Build Credit from Scratch or Repair It

Become an authorized user on a trusted person’s credit card (their history helps you).
Get a secured credit card (requires a deposit but reports like a normal card).
Apply for a credit-builder loan (Self, Credit Strong, or local credit unions offer these).
Keep old accounts open (even if unused) to maintain credit age.

Diversify Your Credit Mix

Having different types of credit (installment loans + revolving credit) can help—but don’t take out loans just for this. credit habits.