Boost your credit score with these 5 simple tips for improving your FICO Score or VantageScore


Your credit score is one of the most important numbers in your life and, unlike your salary, it's a number you have almost total control over. You don't need anyone's help to improve your credit, and raising your score is totally doable.

If you don't even know what you credit score is, sign up for a free service like Credit Karma or Credit Sesame to check or see if your credit card company already provides this information on your electronic statement. If the number isn't high enough — a score of 700 is considered good, while 750 or higher is excellent — start thinking about what you can do to raise your number.

Five simple steps can make a huge difference in this all-important number, which will determine how much you pay for everything from your mortgage to your car insurance. You can save thousands in interest costs with better credit, and have a better choice of loan products. 

1. Keep this number as low as possible

Your credit is impacted by many factors, but one of the most important is your credit utilization ratio, which is the amount of available credit you've used. "A high utilization rate is a sign that you may be experiencing financial difficulty and is a strong indicator of lending risk," Experian's website explains. To avoid a ding on your credit score, try to keep yours at 20% or lower by paying down debt.

Paying off debt matters even more under VantageScore's new method of calculating credit scores, which rewards you for lowering your credit utilization ratio. Paying down as many debts as possible at one time boosts your score the most with this method, even though fully paying off higher-interest debts would cost less and fully paying low balances would keep you more motivated

Whichever method you choose, create a budget that frees up cash to make larger payments to reduce your balances. "If you have debt — especially credit card debt — you should be working to pay it off," Matt Schulz,'s senior industry analyst, told the Washington Post.  "If anything, it may become more important to show that you’re making progress over time," he said in reference to VantageScore's new scoring method. 

2. Make this smart call

One way to improve your credit utilization ratio right away is by calling your credit card company and asking for a credit line increase. Eight in 10 people who called to ask for a higher limit were granted one, CNBC revealed.

While you have the company on the phone, ask for a waiver of an annual fee if you're paying one — 82% of creditors reduced fees for those who asked, and you can use those savings to pay down debt — and ask the creditor to remove a notation of a late payment if you have any. Many creditors will get this giant black mark off your credit report if you are generally a good customer and you make the effort to ask. 


3. Don't be an accidental defaulter

Shockingly, a single late payment can drop your score by more than 100 points. Avoiding late payments on credit cards is easy: Just set up auto-debit of at least the minimum balance from your bank account. You definitely want to pay more than the minimum to avoid high interest charges, but automated payments also ensure a forgotten check won't derail your credit. 

Some bills could be harder to pay — especially if you don't know you owe. "Something seemingly as small as having a low-dollar bill go into collections can have a very large-dollar impact," Manisha Thakor, a certified financial planner, or CFP, told Bankrate.  

While some scoring models don't ding your score for collections or late payment on debts of $100 or less, others will dramatically lower your score if your utility sent you to collections because you forgot to pay a $5 bill before you moved, or if you didn't pay a $40 medical copay because you mistook a bill from the doctor's outside billing service for junk mail. 

To avoid becoming an accidental defaulter, go through all of your mail carefully, check with all your utilities companies about unpaid balances when moving and set up as many bills as you can for automated payments. 

4. Be proactive, with regular checkups

You don't want to drive yourself crazy worrying about your credit score, but you can't ignore it altogether, either. A poor credit score could cost you more than $30,000 in interest over your lifetime and, on top of that, could also raise your auto insurance rates. Avoid these unnecessary costs by keeping an eye on your credit and doing a little research before making a borrowing decision. 

"Check your credit report annually, and review it carefully," CFP Brittney Castro told USA Today. "Make sure the amounts you owe are correct, and that any late payments aren’t incorrectly listed." You can check your report for errors — which one in five consumers have — by obtaining three free reports a year from If you spot a mistake, dispute it

Before you open a new credit card or rack up a big charge, consider how it will impact your credit score. Credit Karma's score simulator shows you how different actions could help or hurt your score. Understanding the impact of your actions will help you make better ones.

5. But don't get stuck in the weeds

You could drive yourself crazy trying to tweak your borrowing and spending to model the behavior that companies reward, but you really shouldn't.

"There are hundreds of methods for calculating an individual's credit score, and many lenders use private models with proprietary outcomes," CFP Sandy Patrick explained.  And, formulas don't always stay the same. VantageScore recently modified its scoring methods to better assess the trajectory of borrowing and reward you if you're improving your credit situation — like by paying down debts. FICO has also changed its formula recently. 

"Don't get too hung up on changes like this," Gerri Detweiler, head of market education at business credit site Nav, told CNBC. Instead, focus on three basic tenets: Never pay your bill late, keep your total credit card debt in check, and don't apply for credit you don't need. These are good money moves, and naturally, they'll also help you boost your credit score over time. 

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