To improve your credit score. Focus on 7 factors that make up the largest portions of most credit scoring models.
- Lower Credit Card Utilization (Fastest Impact)
This is often the quickest way to gain points.
Target utilization:
- Excellent: Below 10%
- Good: Below 30%
- Avoid: Above 50%
Example:
- Credit limit = $10,000
- Current balance = $7,000 (70% utilization)
- Pay down to $1,000 (10% utilization)
This alone can sometimes increase a score by 20–100+ points depending on the overall profile.
- Never Miss Another Payment
Payment history is the largest scoring factor.
If currently behind:
- Bring accounts current as quickly as possible.
- Set up automatic payments for at least the minimum amount due.
One recent 30-day late payment can significantly lower a score.
- Request Credit Limit Increases
If balances stay the same but limits increase, utilization decreases.
Example:
- $5,000 balance on a $10,000 limit = 50%
- Same balance on a $20,000 limit = 25%
This can boost scores without paying down debt, though paying down debt is even better.
- Become an Authorized User
A family member with:
- Long credit history
- Perfect payment history
- Low utilization
Can add someone as an authorized user on a credit card.
Many scoring models will consider that positive history, potentially producing a meaningful score increase within 30–60 days.
- Pay Collections Strategically
Not all collections affect scores equally.
Focus first on:
- Recent collections
- Medical collections (many newer scoring models treat these differently)
- Collections required by a mortgage lender
Before paying a collection, confirm whether the creditor will remove or update the report.
- Correct Errors on Credit Reports
Review reports from:
Dispute:
- Incorrect late payments
- Accounts that aren’t yours
- Incorrect balances
- Duplicate collections
Removing one reporting error can sometimes result in a significant increase.
- Avoid Opening New Accounts Right Before Applying for a Mortgage
Each new application can create a hard inquiry and reduce the average account age.
For home buyers, it’s generally best to:
- Avoid new credit cards
- Avoid furniture financing
- Avoid “buy now, pay later” accounts
for several months before applying.
