How To Improve Your Credit Score

If there’s anything the recession taught us, it’s the importance of avoiding excessive debt and maintaining a good credit score. Even now, lenders require better credit than they did five or ten years ago. So whether your goal is to get a new credit card, an auto loan, or get approved for a mortgage, you may need to improve your credit score to do so.

Here are a few simple steps you can take to improve your credit score.

The Three Best Ways To Improve Your Credit

The best ways to improve your credit score, assuming you already have a few open lines of credit, is to:

  • Pay every bill on-time every month. Whether or not you’ve missed payments in the past, a consistent record of timely payments going forward is the single best thing you can do to improve your credit.
  • Pay down credit card debt. Too much debt drags down your credit score, especially if one or more credit cards are maxed out. Work on reducing these balances to improve your credit.
  • Don’t apply for new credit. (At least until you really need it). Opening new cards to transfer balances will most likely lower your credit score. If you’re trying to improve your credit for a car loan or mortgage, don’t apply for other credit for six months to one year beforehand.

Other Ways to Improve Your Credit

If you only have one or two credit accounts on your credit report, opening a new line of credit like a credit card may actually improve your credit score over the long run if you pay it on time. Unfortunately, credit cards aren’t approving many people these days. And you want to avoid applying for several cards and being declined, because anytime you request a new line of credit, whether or not your approved, it appears as an inquiry on your credit report. If you have more than two or three of these within six months to a year, it can decrease your score.

What to do? If you seriously need to build your credit and only have one or two accounts, open a card that you know you’ll be approved for. Many applicants with credit scores about 600 can qualify for the Capital One Platinum Credit Card. 

Use your cards once or twice a month and repay them in full for six months to a year, and you should be able to add a few points to your credit score. (Note: It’s a myth that you need to carry a balance to build good credit. In fact, the lower your balance on your credit card accounts, the better your credit rating).

Keep an Eye on Your Credit

As you work to improve your credit score, you want to make sure your efforts are paying off. To do that you’ll need to monitor your credit report and score periodically. You can obtain a truly free copy of each of your three credit reports (from Experian, TransUnion, and Equifax) once a year from This is the only site that is truly free, as required by federal law.

Although you should check these reports at least every year to ensure a.) you haven’t been the victim of identity theft and b.) your creditors are reporting account information accurately, these reports don’t provide any of your credit scores (like credit reports, you actually have multiple credit scores, even though FICO is the most commonly mentioned).

CreditKarma is a free service (supported by advertising) that lets you see your TransUnion credit score as often as you want. Alternately, you can enroll in a credit monitoring service for between $15 and $20 a month. These services will provide you with unlimited access to both your credit reports and scores. These services are good for consumers who are serious about increasing their credit scores in a year (to purchase a home, for example). For others, checking your scores once a year for free may be adequate.

It’s important to note that checking your credit score or report—whether it’s through, CreditKarma, or another credit monitoring service, does not lower your credit score in any way. Checking your own credit is known as a “soft credit check”. When banks check your credit because you applied for a loan, it’s called a “hard credit check” and it will appear on your report and may temporarily lower your score.


About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.


  1. I raised my credit score by over 100 points in a year last year. I had relatively little credit, and had an outstanding account on my record I wasn’t aware of. I applied for 2 new credit cards, and 3 store cards, and wrote an appeal to the collections agency that if I paid the outstanding balance (was only like 60 dollars), that they would DELETE my negative mark (not mark as paid, but wipe from the record).

    After maintaining good payment on the 5 new credit cards I had (for a total of 6–3 standard credit cards and 3 store cards), as well as having 0 negative marks on my record, I increased my credit score from 615 to 724 average.

    That was about 6 months ago. I now have a credit score of 768 without changing anything… just paying my cards in full each month and letting the banks increase my credit limit periodically. I am only 24 and do not have a mortgage, student loans or anything else that would be beneficial to my credit score… this was all done with cards only.

    According to projections on credit reporting sites, I will have over 800 credit score by the beginning of 2010 just by continuing the path I’ve taken! Awesome!