If you want a higher credit score, there’s no getting around the obvious: You’ve got to manage your debt load and pay your bills on time. Here are five things you can do to raise your number:

1. Make on-time payments.

Set up automatic payments at your bank, put reminders in your calendar, slap sticky notes on your refrigerator—do whatever you need to do to make your payments on time. Your payment history is the largest component of your score, making up 35%, and your length of credit history makes up another 10%.1

2. Don’t max out your cards.

Don’t carry over large balances from month to month. The second biggest factor in your credit score is what’s called a credit utilization ratio, or how much of your available credit you’re using, accounting for 30 percent.4 In simple terms, whatever your balance is on your credit card as a percentage of your limit, that’s your credit utilization for that card. Credit reporting bureaus look at both the utilization on each card and the utilization across all of your cards. Generally, the lower the utilization the better, so it’s a good idea to pay off your debts in full every month, and keep those debts a low percentage of the limit.

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3. Don’t take on too much credit at once.

Only apply for the credit you need. Each time you apply for credit you rack up a “hard inquiry,” which dings your score.3

Besides the credit inquiries, opening too many credit cards can make it hard to keep up with all the bills. For people who have a lot of debt across multiple cards, a consolidation loan can make a lot of sense. That’s because it can make it easier for you to accomplish both of the above goals. A consolidation loan means you can make one monthly payment, sometimes at a lower interest rate, rather than several payments.5 That reduces the chances that you’ll miss a payment. Further, a consolidation loan can significantly lower your credit utilization.

4. Maintain a healthy mix of credit.

Creditors like to see consumers wisely utilizing different types of credit, including revolving accounts such as credit cards, and installment loans, such as car loans.4

5. Know what’s on your credit report.

Pulling your own credit report is considered a “soft inquiry” and does not impact your credit score in the way a hard inquiry does. Monitor what credit reporting agencies are saying about you, and challenge any inaccurate information they may be reporting. This is also a good idea to protect yourself against identity theft.5


1. http://www.myfico.com/crediteducation/WhatsInYourScore.aspx

2. http://www.nerdwallet.com/blog/uncategorized/revolving-debt-worse-credit-score-installment-debt/

3. http://www.creditkarma.com/article/hard_inquiries_and_soft_inquiries

4. http://www.creditcards.com/credit-card-news/fico-score-type-credit-loan-mix-1270.php

5. http://www.nerdwallet.com/blog/credit-cards/credit-score/reasons-to-check-your-credit-report-today/

Legal Disclaimer: The articles and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. 

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