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Improve Your Credit Score

Improve Your Credit Score

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Daniel Cohen
UpdatedApr 14, 2015
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    6 min read
Key Takeaways:
  • Review the steps to take to raise your credit score.
  • Understand how your credit score is calculated.
  • Pay your bills on time and manage your credit utilization.

Learn 7 Techniques to Improve Your Credit Score

Don't take your credit score and credit history for granted. A small credit problem can grow into a bigger one. Bad credit causes financial harm, but also can affect getting a job, the rates you pay on insurance, or being able to rent a place to live. Avoid serious harm from credit mistakes tehat can follow you for many years. If your credit is not as strong as you want it to be, here are seven techniques to improve your credit rating.

1. Establish Credit History

Your credit rating is established partially on your credit history. Your credit history is based on the information that your creditors have reported to credit bureaus, including the history of how you handled your credit cards, loans, and even some utility bills. If you have little to no history, the creditors are leery about offering you credit. They do not have enough information from your past to view you as a good credit risk, so your credit will be established at a lower rate. If you want to build your credit, get a credit card, charge a few things, and pay off the majority of the balance. Financial experts recommend keeping your account balances less than 30% of your available credit. It shows that you have the ability to pay back your debt, without letting it grow out of control.

If you have no, very limited, or a bad credit history, you may be turned down when you apply for credit. If so, consider applying for a secured credit card.

2. Secured Credit Card

Secured credit cards require you to deposit cash in an account with the credit card bank and the credit line available on the card is equal to the amount of cash you have on deposit, less any fee that the issuer charges you to establish the account. Make sure that your secured card issuer reports your card activity to the credit bureaus.

3. Co-signer

If you can find someone willing to co-sign for you on a loan or credit application and the account is kept in good standing, this will help your credit score improve. It can be hard to find a co-signer; because, if you default on a payment, the co-signer is fully responsible for the debt and any fees and interest tacked on and the co-signer’s credit will suffer, too.

4. Make Payments on Time

If you pay your bills late, you are not only incurring late fees and exposing yourself to a hike in your interest rates, but you are also damaging your credit. If you miss a payment entirely or are 30 days late on a bill, your credit will suffer serious harm. Your payment history, even for minor items such as utilities and cable television, can be reported to the various credit bureaus. Any missed or late payments are recorded and reported on your credit report. If you want to build and maintain your credit rating, pay your bills on time and do not miss any payments. If you have missed payments in the past, get back on track. Your recent payment history counts more than ancient history, so do not let a past problem be an excuse to let the problem continue to reoccur.

5. Pay Off Your Debt

If you have debt, pay it off. Do not transfer your debt from one credit card to another to card, even when lowering your interest rate, without making a concerted effort to pay down the debt. Start budgeting to pay off your debt. Pay off that credit card and your other debt payments until nothing remains. The longer you continue to carry debt on which you are paying interest, the more you will end up spending to pay it off.

6. Control Your Credit Utilization

The amount debt you carry compared to the maximum size of the credit lines you have been granted results in how creditors view your credit utilization.  Credit utilization is measured at the close date (typically monthly) and then reported to the bureaus. A reporting period is typically 90 days, so a charge and then quick payoff should not hurt your credit utilization.

FICO, the most often-used credit scoring system, measures utilization at the individual card level (and possibly in aggregate). Be aware that if you have an individual credit line or credit card that has a balance that is more than 30% of the credit limit, this could negatively impact you. If you have a maxed out card, this will certainly hurt your credit score. You should examine all your credit lines and work to pay down each one so that it is not more than 30% of the maximum credit line you were issued.

7. Don’t Apply For or Take on Too Many Credit Cards

Having and using a credit card wisely will improve your credit rating. A standard guideline is to maintain least three active trade lines in good standing. A trade line is credit industry jargon for a type of account, such as a department store credit card, a card issued by a oil company, a student loan, and so on. Ideally, they should be a mix of different types of accounts, such as a home mortgage, car loans, bank credit cards, store credit cards, unsecured personal loans, or loans for furniture or electronics.

However, if you constantly apply for new credit cards, it can hurt your rating, especially if you repeatedly are turned down for them. Applying for too many credit cards, in a way, shows that you do not have enough capital to afford your cost of living. If you are getting turned down by creditors, that is an indication that your credit standing just is not up to par. Other creditors will weigh these rejections against you.


Your credit score can have a large impact on your ability to achieve your life goals. Your credit rating dictates the interest rate you will receive on loans and whether or not you qualify for a loan or additional credit. Most Americans plan to buy a home or car sometime. If you have bad credit and do not take steps to improve it, you will pay the price, by paying higher interest and by having your choices limited. A credit problem that is left to grow will severely harm your ability to purchase a home, a car, or even get basic cable television or a cell phone.

If you want to improve your credit score, make sure to take the necessary steps. Pay off all debts, control your credit utilization, have a mixture of accounts, and pay everything on time. Most anyone, even someone who has just completed a bankruptcy, can build a good credit score in a couple of years by taking the proper steps.

Get rid of your debt faster with debt relief

Get rid of your debt faster with debt relief

Take the first step towards a debt-free life with personalized debt reduction strategies.

Choose your debt amount

Get started now

Or speak to a debt consultant  844-731-0836


KKaw Kay, Jan, 2020

I go withdraw at ATM

RRebecca, Dec, 2019

I have seven credit cards that I pay off every month and never charge more than 20 percent of its limit. My house, vehicle, etc. are all paid for. I spend very little as I need little. I have been frugal all my life and now I find a credit score of 500. I don't owe a soul and am very careful with my money. I just don't understand why I am penalized for that.

DDaniel Cohen, Dec, 2019

Something doesn't add up. Have you looked at your credit report to make sure that something inaccrurate is not bringing down your score? Whatever you do, don't pay for any professional help, until you look over your report and review it carefully. You can get a free credit report at

AAnonymous, Aug, 2019

I have 3 accounts that have late payments documented that are within 1 – 2 years of the 7 year reporting frame. During that period my husband was out of work due to health issues. Although I made several late payments, I did make payments and eventually paid off all the accounts including all the late charges etc. They are current paid off and closed. Since then my credit is flawless. These accounts are bringing down my score. Although the only debt I have at this point is my mortgage and I don’t use credit cards anymore, things like my auto/homeowners insurance rate are affected. I would like to write goodwill letters to each company asking if they will go ahead and stop reporting the accounts to the credit agencies. My only concern is that they are the oldest accounts on my record. Removing them will somewhat decrease the age of my overall credit history. 

DDaniel Cohen, Aug, 2019

There is no harm in you writing to the firms, but don't expect them to remove the accounts from your report. After this many years, the damage is not great from the old accounts. What is holding your score back from improving is that you need to be using credit and paying it responsibly. Look at your credit report as if it is a trial about your creditworthiness. Your mortgage is a strong witness that you are a good credit risk. The accounts that went into collection testify to the opposite.

You should have more active accounts that will show, by their remaining in good standing, that you are a good risk who repays debt as agreed. Don't go wild. Open a credit card account, use the card, and pay it off each month. After six months, open another card. In 12-15 months, your score shoudl rise markedly, though there will be a very small hit as you open the new account. 

BBrad Stroh, Jul, 2014
great article, thanks for the credit tips!
KKell, Feb, 2014
Would it be possible to skip the collection agencies and pay the bank the debt to which you owe?
BBill, Feb, 2014

A creditor will either sell a collection account to a collection agent, or will hire a collection agent to collect an account. When a creditor sells an account, it has no rights to the account anymore. If the consumer pays the creditor, it must turn this money over to the collection agent who owns the account. The opposite is true if the collection agent is a hired gun, so to speak.

A consumer does not know if the collection agent owns all rights to their account, or is merely a hired hand. The collection agent is not required to disclose that information. Indeed, the front-line collection agent a consumer talks to may not honestly know if asked.
DDeborah, Dec, 2013
Will my husband's medical bills affect me? I am the one who has the insurance. I am not sure if the collection agency is just trying to scare me into paying. Will it affect my credit score?
BBill, Dec, 2013
I cannot give you a quick yes or no answer to your questions. A married person has liability for his or her spouse's medical bills if: • The non-treated spouse signed a guarantor agreement with the medical service provider, or • The treated-spouse's state of residence has a doctrine of necessaries rule (also called doctrine of necessities), which requires spouses to pay for each other's medical care, or • The treated spouse lives in a community property state where the presumption is that debts incurred by one spouse during marriage are owed by both spouses

If you have liability for your spouse's medical debt, then the creditor(s) can report this information to the consumer credit reporting agencies, and it will appear on your credit reports.