10 Legit Ways to Improve Your Credit

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The information on your credit report affects your life in many ways. Your credit standing will have an impact on whether or not you’re approved for loans and what interest rate you’ll pay.

In addition, your credit score can affect whether or not you get jobs you apply for. Insurance companies and other companies sometimes use your credit score to determine how much you’ll pay for insurance.

Are you interested in having a credit score that reflects your good character? If so, there are steps you can take to improve your credit.

How to Raise Your Credit Score

Improving your credit isn’t an overnight endeavor. Credit-scoring models such as FICO®* rate your credit score between 300 and 850.

Your FICO Score® will give you a label as follows:

●     Exceptional Credit: 800-850

●     Very Good Credit: 740-799

●     Good Credit: 670-739

●     Fair Credit: 580-669

●     Very Poor Credit: 300-579

Source: Experian®

1. Know Your Credit Score

The first step to raising your credit score is knowing your credit score. Did you know you’re entitled to one free copy of your credit report each year? Your credit report contains information about your payment history, account history, and is used to help determine your credit score, which is based on this information and other creditworthiness factors.

If you go to www.annualcreditreport.com you can get a copy of your credit report, but it will not include your credit score. This site will pull your credit reports from each of the three main credit reporting bureaus: Equifax, Experian and TransUnion.

While your credit report won’t show your credit score, you can get your score from each of the credit bureaus as well as from other sources. These scores will probably vary somewhat, but they’ll all give a general picture of how you handle credit.

When I pulled my credit reports, the site had an offer to get all three of my scores through a free trial of Experian CreditWorksSM.

You can use this offer to get your free credit scores or search elsewhere online. Just be sure you’re getting accurate FICO® scores when you use other online sources.

As mentioned in the bullet points above, your credit score will typically range from 300 to 850. Once you’ve determined what your current credit score is, you can work on improving it.

2. Work to Create a Healthy Credit Utilization Rate

A large part of how your credit scores are determined takes into factor what’s known as your credit utilization rate. In simple terms, this is the percentage of available revolving credit you’re using.

For example, let’s say you have three open credit cards. One has given you a $10,000 limit and the other two have each given you $5,000 limits.  

So, you’ve got $20,000 in available credit between the three cards. If you have balances across all three cards totaling $10,000, you’ve got a 50% credit utilization rate.

If you’ve used $5,000 of those available balances, you’ve got a 25% Credit Utilization Rate. A fast way to calculate your credit utilization rate is to divide how much you currently owe by your credit limits across all your credit card accounts.

Two Ways Your Credit Utilization Rate is Factored

Note that you’ll want to calculate your total credit utilization rate as well as your credit utilization rate for each of your credit cards. This is because they both count when FICO® determines your credit score.

Here’s how. Let’s take the scenario stated above where you’ve got the three credit cards. You’ve got a $10,000 outstanding balance on your credit that has the $10,000 limit. The other two cards with the $5,000 limits both have a zero balance. 

That individual card has a 100% credit utilization rate, even though your total credit utilization rate is only 50%.

It’s important that the credit utilization rates on both your individual cards and your balances as a whole are good. This is because your credit utilization rate impacts up to 30% of your credit score.

So, you might be wondering what is considered a “good” credit utilization rate. To get or keep your credit score at an optimum number, your credit utilization rate should be no higher than 30%. For the highest credit scores, you’ll want a rate of 6% or lower.

This is for both your individual credit accounts as well as your revolving credit balances as a whole. To credit-scoring models such as FICO®, anything higher than 30% indicates that you may be having trouble managing your money.

If you’ve got credit card balances, work to get each of them below that 30% utilization ratio.

3. Work to Clear Up Reporting Inaccuracies

Now that you’ve got your credit report, it’s time to check it for inaccuracies. Credit reporting inaccuracies happen all the time. In fact, a study conducted by the Federal Trade Commission found that one in five people have an error on at least one of their credit bureau reports.

It’s important for you to check your report thoroughly to look for any potential errors. Some potential errors to check for include:

●     Errors in personal information such as your name, birthdate, address, etc.

●     Accounts that don’t belong to you showing up on your credit reports

●     Closed accounts reported as open

●     Incorrect balances reported on accounts

●     Charge-offs or collection items that don’t belong to you or are erroneously reported as still being owed

You can clear up any reporting inaccuracies by contacting the bureau whose report contains the inaccuracy. Or you can contact the creditor that reported the erroneous information.

4. Use Experian Boost

Experian Boost™** is a new product from credit reporting bureau Experian. It’s meant to help you raise your FICO Score – instantly in some cases. Here’s how it works.

Let’s say you’ve been making utility and telecom payments on time, such as your phone bill, electric bill, etc. With your permission, Experian Boost can access your bank account to verify on-time payments for those items. 

Once you verify that you’d like to include these accounts in your credit file, Experian adds them to your credit report, often giving your FICO Score an instant boost. Experian Boost is free when you sign up for a free Experian membership.

In doing their research on the product, Experian found that 75% of customers with a FICO® Score under 680 saw an improvement in their FICO Score after using Boost.

If you’ve been paying your utility payments on time, this might be a good product for you to use to improve your credit.

Increase Your FICO® Score Instantly for Free! Results may vary, see website for details.

Related Article: Experian Boost Review

5. Go Easy on New Credit Accounts

Another factor in improving your credit is to go easy on new credit cards. Many times you’ll get a new credit card in order to take advantage of a lower interest rate.

Or, you’ll get a discount for opening a new store credit card when you shop. That’s okay; just be sure you’re not immediately going out and spending large amounts of money on that card.

Use it here and there, but don’t use it too much. If you’re using it for a balance transfer, that’s okay because the card you’re paying off will impact your credit score for the better.

The moral of the story is to keep new card usage to a minimum.

6. Open a Secured Credit Card

A secured credit card can be a great way for you to improve your credit. How? Because you have to put down a deposit for the card that typically equals your credit limit. That “secures” the card in case you stop making your monthly payments on the card.

So, if your new secured credit card has a $500 limit, that means your creditor has your $500 deposit in an inaccessible connected savings account to cover any missed payments. Making your monthly payments on the card will help build your credit.

Bonus: pretty much anyone – even fresh off a bankruptcy – can get approved for a secured credit card. This is because there’s no risk to the lender, thanks to the connected savings account. 

7. Don’t Close Unused Credit Cards

Closing unused credit cards is okay; just be sure to do it slowly. And if you don’t have too many unused credit cards out there, you may just want to keep them open.

Why? Because those old, unused credit cards offer two benefits to your credit score:

●     A long credit history

●     A boost to your Credit Utilization Rate

You may want to close the cards if they’re joint cards with an ex-spouse or another person you aren’t involved with anymore. However, if you can, keep them open.

The excess available credit on them won’t hurt you unless you start maxing the cards out. You may be worrying about fraud with old unused cards, but keeping a regular eye on your credit report will help ensure any fraudulent activity will get caught early. 

8. Pay Off Outstanding Collection or Charged-Off Items

Do you have old unpaid collection items or charged-off items? If so, paying them off may improve your credit score. Any old unpaid items on your credit report should have a contact number for the lender or collector.

Use that number to call in and negotiate a payoff strategy. After you’ve paid the old collection or charged-off item in full, be sure to ask the lender to report that to the credit bureaus.

In addition, follow up by checking your reports to ensure the payoff was reported properly. If you’re having trouble with paid off items showing as unpaid, call the credit bureaus. Be ready to show proof that the item has been paid off.  

9. Opt for a Debt Payoff Strategy Instead of Bankruptcy

If you’re facing an enormous amount of debt it may be tempting to file for bankruptcy. However, a bankruptcy reporting will negatively affect your credit for up to ten years.

For that reason, it’s a good idea to formulate a debt payoff strategy instead of filing for bankruptcy if possible. There are debt payoff apps that can help you to formulate a plan for getting out of debt.

A good debt consolidation company can help you pay off debt too. Just beware of companies that promise big results with minimal effort. Also, don’t sign up with any company that will charge you an upfront fee to pay off your credit.

And if you’re having trouble getting motivated to pay off your debt, get encouraged by reading debt payoff success stories.

Paying off debt can feel like an impossible dream. However, thousands of people have done it and you can too. Set yourself a debt payoff goal and then make it happen.

10. Keep an Eye on Your Credit Report

Last but certainly not least, it’s vitally important to keep an eye on your credit report. There are many credit monitoring services that can help you do that.

Another option is to use the Annual Credit Report site mentioned above, but to stagger your three free reports.

For instance, you could pull your Experian report in January, pull Equifax in May and pull your free TransUnion report in October. By staggering the reports you can keep a regular eye on your credit report without spending any money.

When you check your credit reports, be sure to handle any errors or fraudulent activity quickly by calling the credit bureau immediately.


Improving your credit may not be easy but it is important. This is especially true if you’ve got a lower credit score, say under 680.

The tips above can help you raise your credit score. A higher credit score will bring you several benefits. You’ll qualify for lower interest rates if you borrow money.

A higher credit score may bring you lower car and homeowners insurance rates too. And a higher credit score may increase your chances of getting that new job you applied for.

Employers often pull credit reports with the assumption that a good credit report means a trustworthy employee.

Don’t allow bad credit to impact your goals and dreams. Use the tips above to improve your credit today.

*Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn more.

**Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.

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