5 smart moves to better your credit and boost your credit score to 800 — or higher


Don't be distracted by your friend's epic trip to Indonesia — or your cousin's packed schedule. If you need a concrete goal that will improve life and is worth being proud of, how about trying to push your credit score to 800? Seriously: Although it may not sound sexy, an excellent credit score opens the door to opportunities like homeownership, affordable loans and five- or six-figure savings over your lifetime.

How does a high credit score do this for you? The better your score, the cheaper it is to obtain a loan for a new house or car; the easier it is to rent; and the simpler it is to be approved for a generous credit card or a cell phone service plan, according to Experian's FreeCreditScore.com.

Conversely, poor credit can cost you in high interest payments over your life, and make interactions tougher with lenders, landlords and utility companies; if you have poor credit, for example, you could be required to pay an extra deposit for utilities or be denied service.

Credit scores typically fall between 300 to 850, per Credit.com: FICO and VantageScore 3.0 scores under 600 are troubling to most lenders, whereas scores between 650 and 699 are considered fair. Good credit starts with a score of 700 to 749 — and anything above 750 puts you in the "excellent" category; 800 and higher is that perfection zone.

Your credit score is determined by five financial categories: payment history (makes up 35% of your score); credit utilization (makes up 30% of your score); credit history length (makes up 15% of your score); account mix (makes up 10% of your score) and new credit inquiries (makes up 10% of your score).

Obviously reaching 800 is no small feat and takes persistence and patience— don't expect to transform your score overnight. But if you put these five habits in place, you'll watch your score rise and rise.

1. Pay your bills on time

Making on-time bill payments carries considerable weight, so it's more important than ever to make sure you don't skip or pay bills late. Credit scoring companies look at your 24-month bill payment track record to help with decision making, according to WalletHub, and even a few late payments can prevent your score from rising.

Also, the longer you wait to pay your delinquent bill, the worse off you'll be, WalletHub says, because the number of days late is considered in your payment history.


How can you get on track for timely payments? "Automate everything," Matt Schulz, senior industry analyst at CreditCards.com said to Mic in an email. "Missed payments can kill your credit. Arrange to pay your credit card bills automatically through either your bank's website or your card issuer's website to ensure that you'll never miss a payment."

2. Avoid closing credit cards

Credit card management is part of your credit utilization, payment and credit history length. While it may sound counter-productive to leave a credit card you don't use open, experts like Heather Battison, vice president at TransUnion explains that closing credit cards can actually hurt your score: "Once you close it, your overall credit limit changes and your utilization will also change," she said to CNNMoney. "We always caution: Don't go and just start closing down credit cards — especially those you've had open the longest."

But should you keep paying an annual fee on a credit card you don't use? Rather than closing it, call your credit card company and ask to be transferred to a similar card with no annual fee, recommends Wise Bread. This request is also important if you have a secured card, which helps to build credit.

To improve utilization, Schulz said, cardholders should consider boosting their credit limit:  "For example, if you have a balance of $2,000 or more and $5,000 of available credit, your utilization rate is a higher-than-desired 40%. Get that credit limit bumped up to $10,000, while keeping the same balance (or less), and your utilization falls to just 20%, which should help your credit."

3. Apply for credit sparingly

While you don't want to close your credit cards, you  also don't want to apply for a bunch of new ones either — at least not all at once. Credit applications that hit your score the hardest are credit card applications, according to Nerdwallet, especially if you apply for several cards in a short period of time.

Why? Because the short window sends a red flag to lenders that you are riskier than someone who only applies for fewer cards at a time.

jezebel.com /Giphy

Conversely, if you are mortgage loan shopping, and apply for a few loans, your score may dip slightly but won't have the same impact as if you apply for multiple credit cards, according to Nerdwallet. Other loan inquiries that won't make a tremendous impact on your score include student and auto loans, according to MyFico.  

4. Boost your credit history by piggybacking on your parent's or partner's credit

One disadvantage for young credit builders is time, as reaching a score of 800 based on recent credit alone could be close to impossible. However, you could kick up your credit history by becoming an authorized credit card user on your parents' or partner's (or another older adult's) account. Being an authorized user allows for that person's credit history to appear on your report, but you are not legally responsible for their debt.

While becoming an authorized user sounds like a no-brainer, Credit Karma warns that any credit mismanagement by the other person could still affect your credit report. So yet another strategy is to become a joint account holder, which comes with more control — and responsibility. You've got options.

5. Open a nice mix of accounts

Consumers with higher credit scores tend to have a variety of credit accounts, according to Credit.com. Credit scoring models want to see how you handle a variety of loans so having a mix of revolving accounts (credit cards or a home equity line of credit), installment accounts (student loans, mortgage, auto loans) and open accounts (cell phone bill, electric bill) is a good idea.

Now, you shouldn't run out and apply for loans that you don't need, so Credit.com suggests one way to mix up your accounts is by consolidating high-rate credit card debt to a personal installment loan.

And, if you haven't yet, you should definitely apply for a credit card. Hooked on paying for everything with your ATM card? Get motivated by looking for a cash-back credit card that will reimburse you $50 or $60 for every $1,000 spent.

Also, don't forget that simply checking your report for errors can have an tremendous impact: "Get your free credit report at AnnualCreditReport.com, look it over for errors and if you find any, report them immediately," Schulz said. "Clearing errors off of your report can give your score a big boost."

Even just a 20-point change from catching a mistake could help bump you into a higher credit tier.

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