How Can I Improve My Credit Score?

Your credit score is a big deal when it comes to applying for a mortgage or a car loan.

By Leah Golden

 

Credit scores range from 300 to 850, according to the National Foundation for Credit Counseling. The higher your credit score, the more money you can borrow and the lower your interest rate.

Staying current on your loan payments may be a no-brainer but controlling your credit utilization rate may be new to you. According to NerdWallet, credit utilization shows a credit card’s balance in relation to its credit limit. Keeping your credit card debt lower than 30% of the card maximum will keep credit utilization from dragging down your credit score.

Improving your score takes time. Getting your credit report is the first step. (Your score and your report are different, but related, things.)

You can get a report for free, but only if you request it through www.AnnualCreditReport.com. Your credit report shows your current debts. You can request one free credit report from the three major credit reporting agencies every year.

What influences my credit score?

Credit scores are influenced by five different factors, according to theBalance.

• Bill payment history

• Level of debt

• Length of credit history 

• Types of credit 

• Multiple credit inquiries made by you

Where can I get my credit score?

Your credit score is not included on your credit report. The most widely used credit score is the FICO score created by the Fair Isaac Corporation. Businesses use this number to help determine how likely you are to pay back the money they loan you.

FICO credit scores are not free.

You also can purchase your credit score from one of the three major credit reporting agencies – Equifax, Experian and TransUnion. Each uses its own formula for calculating the score. As a result, each will be a little different. You can purchase all three directly from FICO at www.myfico.com.

Personal Finance