5 Tips To Improve Your Credit Score (2024)

Some think a credit score is a number that puts an arbitrarily derived value on someone's creditworthiness. This couldn't be further from the truth. Credit scores are important and can be the difference between getting financing, a loan, or even a job.

Just as it takes time to build credit, it can also take time to repair credit. If improving your credit score is on your to-do list for the new year, take a look at our five tips to improve your credit score.

1. Know and Monitor Your Credit Score
   If you're reading this, then you likely already have an idea of what your credit score is, but if you're simply doing some legwork on how to improve your credit, then it would be wise to have a copy of your credit report in your hands. By law, you are allowed a free credit report from each of the major credit reporting agencies: Experian, Equifax, and TransUnion. You can request a report from any one or all three of the agencies to keep tabs on your credit report. Since you get one free one each year, you can request one every four months throughout the year and keep a rough score of your credit report over time.
2. Check for Discrepancies
   Mistakes happen, but when you're talking about your credit score, they can also be expensive. Studies have shown that roughly 20% of all credit reports have mistakes, and a big mistake could be very costly to you if you're looking at getting a loan or a mortgage.

   Grab your credit report, comb it over, and make sure there aren't any glaring issues. Check that all of your personal information is correct, make sure all of your credit accounts are accounted for, and check that there aren't any incorrect payment or delinquency issues.

3. Pay on Time and in Full
   Payment history comprises 35% of your credit score, which means that delinquent payments or not paying in full will damage your credit significantly. If you have a bad habit of paying your credit card or cell phone bill late, then break it right away! Since payment history makes up a substantial chunk of your credit score, it can also make the most significant impact if you choose to take steps to improve it. Pay on time and see how much of an impact it makes.
4. Pay Down Debts
   The amounts you owe on credit accounts make up 30% of your credit score. Just like paying on time, paying off your credit notes will give you a big boost and a major step towards improving your credit score over time. Petty debts can be especially burdensome to many Americans. Small debts such as unpaid medical bills, unpaid utility bills, or skipping out on something paltry can hit you on multiple fronts in your credit score. If possible, knock out those overhanging debts ASAP.
5. Don't Apply for More Credit
   If improving your credit is the name of the game, then stop applying for more of it. While credit card offers from various banks and merchants may seem great on the surface: 10% off, 0% APR for 60 months, $200 credit, etc., applying for that credit isn't so great. Every time you apply for a new line of credit, a little red flag goes up on your credit report. New credit accounts for 10% of your credit score, but new credit apps or new lines of credit can take their toll.

Don't let shaky credit get in the way of buying your dream home. With these tips, you can improve your credit faster than you thought was possible.

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