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Build and improve your credit score

A good credit rating can play a huge role in your financial success. Not only does a good credit score allow you to get approved for loans and credit cards, but it also allows you to get things like cell phone service, rent an apartment and get a job. Many auto insurance companies check your credit rating to determine your auto insurance premium. Establishing and maintaining a good credit score can save you money and improve your financial future.

What are some ways to establish credit?

Talk to your credit union or bank about opening up a secured credit card or credit builder loan. You may also be able to get approved for a loan or credit card with the help of a co-signer. Make sure your co-signer understands that they are on the hook for the full amount owed if you don’t pay.

What are ways to build credit?

First, if you don’t have an open, active credit account you will want to talk to your bank or credit union about getting one. A secured credit card is a great option to get started.

Next, make sure you are paying at least the minimum amount due by the due date each month. Late payments account for 35% of your credit score, therefore, one delinquent payment can substantially lower your credit score. Another sign of good credit is keeping your balances low in relation to your credit limit. Your utilization rate accounts for 30% of your credit score so try to keep your balances to less than 30% of your credit limit to maintain a good credit score.

Be careful not to apply for too many lines of credit in a short time. Applying for multiple accounts in a short time frame is a sign of high risk and can lower your score.

Lastly, maintaining a positive credit history over long periods of time will also help you maintain and increase your credit score.

What is a good credit score?

FICO score range from 300-850. A score above 800 is an exceptional score. 740-799 is very good. scores between 670-739 are good or above average, 585 - 669 are fair and 584 or below is poor.

How are credit scores determined?

35% payment history, 30% amount owed, 15% length of history, 10% credit inquiries, 10% types of credit used.

What are simple ways to boost your credit score?

Make payments on time. Pay down credit card balances to less than 30% of credit limit. Avoid applying for multiple credit accounts in a short time frame.

How often do credit scores change?

Lenders, typically, report both positive and negative information to the credit bureaus once per month. Therefore, your credit scores can change a bit each month, depending on what is being reported that month. Payment history and credit utilization combined account for 65% of your credit score. Therefore, you may see a drastic drop in your credit score if a 30-day late payment is reported or your debt load increases.

How often do you check your credit report and why?

You can obtain one free copy of your credit report from all 3 credit reporting agencies at Instead of getting all 3 reports at once, spread out your request throughout the year. Every 4 months, request a report from a different agency; that way you will be able to review your report several times throughout the year, for free. Be sure to check the report for accuracy and dispute any items that are inaccurate. (Note: because of COVID, the three bureaus are now offering free weekly online reports through the end of 2022.)

Our final tips on how to establish and build credit:

Building a good credit rating does take time, so you will need to be patient as you work on establishing and improving your credit. Practicing good credit habits like making payments on time, keeping credit utilization low, and avoiding opening new accounts are all great ways to help you improve your credit score.

If you'd like more advice to improve your credit score, call 888.577.2227 to set up an appointment with an LSS Financial Counselor. We can help you obtain a copy of your credit report and understand it for free!

Credit Improvement with LSS Financial Counseling

These questions were answered by Tasha Symiczek, an LSS Financial Counselor. All questions are a part of Experian’s weekly Twitter chat.