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5 Tips to Improve Your Credit Score

Keeping your credit on track is key to a successful financial future. Here are a few ways to improve or maintain a great credit score:

  1. Request a copy of your credit score report – and make sure it is correct. Your credit report needs to be accurate so that you can apply for loans and get the best rates on insurance, among other things. Everyone is entitled to receive a free copy of his or her credit report annually from each of the three credit reporting agencies (TransUnion, Experian, and Equifax), but you must go through the Federal Trade Commission’s website at Annual Credit Report or call 877-322-8228 to get the free report. If you do find errors, report them to the credit reporting agency that has the error.
  2. Set up automatic bill pay.  Payment history makes up approximately 35% of your FICO credit score. The longer you pay your bills on time, the better your score. Avoid missed payments by setting as many of your bills to automatic pay as possible.
  3. Keep balances low on credit cards and ‘revolving credit.’ Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. You often can increase your scores by limiting your charges to 30 percent or less of a card's limit.
  4. Apply for and open new credit accounts only as needed. Keep this in mind the next time a retailer offers you 10 percent off if you open an account. If you do need a new line of credit, don’t jump at the first appealing offer; compare rates and fees on any offers you receive.
  5. Don’t close old, paid off accounts. According to FICO, closing old accounts can never help your score and can in fact damage it.

Interested in learning more about finances and improving your financial future? Visit our interactive Financial Education Center for more helpful tips.

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