How to Raise Your Credit Score

A low credit score makes getting approved for even the most basic things harder. If you suffer from a low credit score, scroll down to learn how to raise your score.

What Is Your Credit Score?

Your credit score is measured by a specific algorithm recorded by the three main credit bureaus, Equifax, TransUnion, and Experian. However, your score determines what you can and can’t borrow from banks and other lenders. Technically speaking, it is designed to prevent risk to lenders and prevent borrowers from being lent money that they will be unable to repay.

There are five main categories that make up your FICO credit score:

  • Payment History (35 percent): This includes your payment information, including any public records and delinquent accounts.
  • Amounts Owed (30 percent): The total amount you owe to lenders. This often determines how much credit you’re given, depending on how much you currently owe.
  • Length of Credit History (15 percent): How long you’ve had credit cards and your activity during that time.
  • Types of Credit (10 percent): This includes the variety of credit accounts you own, including installments and revolving accounts.
  • New Credit (10 percent): This includes anything from new credit inquiries to newly opened credit accounts.

Why Is Your Credit Score Important?

Your credit score is a vital part of your financial life. Your score will follow you during your lifetime, making it important for you to work towards achieving the highest score possible. A credit score is a number that is based on the information in your credit report, and it tells potential lenders about the risk of lending money to you. While some people may think that their credit scores are only important when they want to borrow money, your score may impact multiple areas of your life.

Gaining Approval for Credit

The most obvious reason why having a good credit score is important is for you to be approved for credit when you need to borrow money. Lenders check credit scores of potential buyers before they will agree to extend credit to them. If you have a low score, your applications for car loans, mortgages, and credit cards may be denied, or you may only be extended credit at high rates of interest. If you are extended credit at high rates of interest, you will end up paying much more for the items that you want over the life of your loans.

Getting the Jobs That You Want

Another good reason to strive to attain the highest credit score possible is that potential employers may check your credit. While this might be controversial, some employers check the credit scores of potential new employees because they think that having high credit scores indicates better trustworthiness and responsibility.

Getting Lower Insurance Premiums

Insurance companies analyze the credit scores of people as part of the metric that they use to determine premium amounts. If you have poor credit, you can expect to pay much higher premiums than similar drivers that have excellent credit scores. Equifax reports that some states forbid this practice, but many others allow insurance companies to take credit scores into account.

Securing Better Rates for Cable or Internet

Many cable providers and broadband Internet providers base their rates on your credit. If you have a poor credit score, you may be required to put down a substantial deposit in order to have your services activated. You may also be denied by some companies and be unable to have the services that you want.

Getting Approved for Rentals or Mortgages

It is important for you to have excellent credit when you are wanting to get a mortgage to buy a home. Even if you are not ready to buy a home, your credit score can make a difference about whether or not you will be approved for an apartment or other rental property. Most landlords check the credit scores of their prospective tenants and may deny you if your score is low. If you are approved for a bad credit mortgage, your interest rate may be sky-high, meaning that your payments may be unaffordable.

Turning on Utilities Without Deposits

When you move into a new home and need to turn on the utilities such as electricity, water, gas, and sewer, your credit score will be used to determine whether or not you will be required to put down security deposits. If your credit is poor, you may be forced to pay security deposits for each separate utility, and the costs can really add up.

How to Check Your Credit Score?

Checking your score from the three main credit bureaus is easy to do, not to mention, completely free. In fact, you’re entitled to at least one free copy a year under the Fair Credit Reporting Act. Plus, you can access your reports from, which is a government-mandated website run by the three credit bureaus.

Take Advantage of a Credit Score Provider

There are a few credit score providers, which offer you a credit score either for free or under a monthly subscription. One of the best ones we recommend is CreditKarma, which will send your Equifax and TransUnion credit scores to you completely free.

Review Your Credit Statements

Some credit card companies may allow their customers to check their credit score either on their monthly statement or directly on their website. Fortunately, this can save you a free credit report overview from the three main credit reporting bureau, until you need it the most.

What Can Penalize a Credit Score?

Late and Missed Payments

Around 35 percent of your score is based on your payment history. This includes data from your current accounts like credit cards and loans, negative public records like a bankruptcy, how past due an account is, and the amount of past due accounts. You can stay on top of this factor by setting up automatic payments, tracking due dates on your calendar, and paying back past due balances as quickly as possible.

Utilizing Large Amounts of Available Credit

Using more than 80 percent of your available credit can also lower your score. Around 30 percent of your score is determined by how much you owe in total. To lower your utilization rates, try to pay off your balance every month.

Short Credit History

Though FICO does not take your age into consideration, it does factor the length of your credit history. This makes up around 15 percent of your score. Unfortunately, this is difficult to fix if you are young. However, you can improve this factor by not closing old accounts and simply wait.

Requesting Too Many New Lines of Credit

By requesting new credit lines, you can actually lower your score. This portion of your score factors in the amount of recently opened accounts, amount of recent credit inquiries, and the length of time between each new credit account. Be careful when opening new accounts and wait plenty of time between each new request.

Only Having One Type of Account

Your score can also go down if you only have one type of credit. Creditors like to see a variety of different types of account as this is a sign of experience. Vary your types of credit by opening new accounts strategically.

What Can Improve a Credit Score

Keep Your Balances Low

It’s important that you try to keep your balances at 40 percent or lower. Generally speaking, the less you owe, the less you’ll need to pay off. Not to mention, the less you owe to your lenders, the better you look as a borrower, and the higher your credit score will be.

Pay Your Bills on Time (Or Early)

The last thing you want is to get behind on your credit card bills, this is where your balances will start getting out of control, and you’ll be spending more than you like. It’s crucial to your credit score that you make payments on time if not early, to improve your overall score.

Sort Out Accounts in Collection

You can keep on trying to transfer it to new accounts, but we suggest that you simply pay off your balances to avoid the hassle. Once you know who your debt collection agency is, contact them and see what you have to do to pay off the balance and report it as “paid off” on your credit score.

However, if the debt seems inaccurate, you should dispute it immediately with the three credit bureaus. The sooner you get your accounts in collection sorted out and paid off, the quicker your credit score will improve.

Get a Secured Credit Card

A secured credit card is a form of credit card that makes you deposit money into the card itself as the line of credit. However, it’s single-handedly the best type of credit card to help your credit grow because you can get one with even the worst credit.

Don’t Delete Old Debt from Your Credit Report

Old debt that is handled correctly is actually a good thing. It shows creditors that you are responsible with your credit. Many people make the mistake of trying to remove an account from their report as soon as it is all paid off. Leaving good debt on your account will lengthen your credit history and boost your score.

Credit Repair Services


SkyBlue has a great reputation for being both reliable and affordable. To get set up, you must pay an initial payment of $59 and then an additional $59 per month. This is much cheaper than most other credit repair services out there.

Additionally, they offer a full 90-day refund if you are unhappy with their services. This sort of guarantee is practically unheard-of for credit repair companies. Their company also has a Better Business Bureau (BBB) rating of A+. is another great service that has a BBB rating of A. They also have a close partnership with TransUnion, which means they can actually view and monitor your credit report for you.

The service costs a bit more than SkyBlue coming in at $89.95 a month. However, for this price, you get regular credit repair services plus credit monitoring, score tracker and analysis, mobile app, and texted or emailed alerts.

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