How to Improve Your Credit Score


When it comes to your financial life, improving your credit score is one of the best investments that you can make. Having a good credit score means an easier time qualifying for loans, credit cards, and more at favorable interest rates.

Credit scores tell financiers how likely you are to repay back your debts, which helps them determine whether or not to approve your request for a loan and how much interest rate to charge.

But how do lenders determine your credit score? Well, in the U.S., FICO and VantageScore are two of the most popular credit score types. Lenders use either of these two to estimate the level of risk of lending to you when you apply for a loan.

No matter the brand though, at the core of the credit scoring model is a rather complicated software program. The following are a couple of things the scoring model looks at when evaluating your credit score.

  • Whether there are any bills that you have paid late.
  • How frequently you have applied for credit in the previous twelve months.
  • Your credit utilization ratio.
  • Your experience with various account types such as installment, revolving, etc.
  • How long it has been since you first opened your first credit account.

If your credit report indicates low credit utilization, consistent on-time payments, and experience managing various account types, then you will probably have a good score.

With all that in mind, Income Realty Corporation shares 5 tips on how to boost your credit rating.

Tip #1: Check your credit reports.


Before putting any plans in place on how to improve your credit score, review your credit reports first. Your goal should be to review what is working for you and what is against you.

In the U.S., there are three major credit bureaus. That is, Equifax, Experian, and TransUnion. Now, what you want to do is pull a copy of your credit report from all three. You can do this for free every once a year by visiting

Once you have downloaded your report, go through it and see what is helping your score or hurting it. Things that can contribute to a good rating include:

  • Minimal inquiries for new credit
  • Older credit accounts
  • A mix of different credit card and loan accounts
  • Low balances on your credit cards
  • A history of on-time payments

On the other hand, things like high credit card balances, late or missed payments, collections, and judgments can major detractors to your score.

Tip #2: Track your progress through credit monitoring services.


Credit monitoring services are companies that you can pay to keep an eye on your credit files. These services, many of which are free, will allow you to receive notifications whenever there is a change to your personal credit.

They usually also provide you access to one of the three credit checking companies. By monitoring your credit rating, you will be able to track whether or not your efforts are working, as well as prevent identity theft and fraud.

Tip #3: Keep your old accounts open.

The credit scoring algorithms also look at how long you have kept your accounts open. The longer you have, the better your credit score will be.

So, don’t close any of the credit accounts you might have. And while their histories will still remain, closing them while having balances on other cards can work against you.

Tip #4: Fatten up your thin credit file.


A thin credit file is a credit history that has few, if any, credit accounts. And, this makes it difficult to build a credit score and this means limited access to credit. Sadly, 62 million Americans have such files, according to Experian.

Luckily, there are a couple of ways in which you can fatten up your thin credit file.

  • Check your credit reports regularly looking for inaccuracies or discrepancies.
  • Don’t apply for too much credit at once.
  • If you rent your home, get your rental account reported to the credit bureaus.
  • Apply for a credit builder loan.
  • Piggyback off of someone you know and trust. You can do this by becoming an authorized user on someone else’s credit card account.
  • Apply for a secure credit card, and then make an effort to pay it off in full and on time every month.

Tip #5: Pay your bills on time and keep your credit utilization in check.


How you pay your bills has a significant impact on your credit score. You can avoid late payments by doing several things. These include: automating bill payments, setting due-date alerts, and creating a filing system to keep track of your monthly bills.

When it comes to keeping your credit utilization in check, the easiest way to do this is by simply paying your credit card balances in full every month. Another way is by requesting for a credit limit increase.


There you have it. Five proven tips on how you can improve your credit score. Essentially, a good credit score means financiers will likely look to lending you money, whether it is for a home, credit card, car, or any other loan type.

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Steve Verrier
NMLS #228111

ANE Lending LLC.
NMLS #1999497

NMLS Consumer Access


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Jacksonville , FL 32225

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