How To Boost Your Credit Score

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Credit scores are a 3-digit number that represents your credit health. Whether you have a good score, bad score, or no score, there are actions you can take to boost your credit score, which can help you qualify for lending and credit cards and open other doors. A good credit score can also save you money.

In this episode, we discuss:

  • What is a credit score?
  • Is your credit score actually important?
  • Ways to check your score for free
  • Simple steps you can take today to boost your credit score

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What is a credit score?

A credit score is a three-digital number that essentially represents your credit health. It’s a predictor of credit behavior.

Lenders and other businesses use credit scores and credit reports to determine your lending risk or how likely you are to pay back what you borrow, whether it’s a loan, credit card or something else.

Your score is calculated using information from your credit reports. Think of your credit report like a report card. It’s basically a summary of your financial information and behaviors. Your credit score is your GPA. It takes everything on your credit report into consideration, and you’re left with a three-digit number that represents your credit health.

There are several credit score models, with the FICO credit score being the most widely used by lenders. Vantage Score is another model. Even within FICO, there are several different scoring models, including industry-specific scoring models and the new UltraFICO, which goes beyond your credit reports to include financial habits based on your bank accounts.

Are credit scores really that important?

Does your credit score really matter? Is it even worth trying to improve? There are competing schools of thought on whether credit scores are important or fair.

I’ll address both thoughts but understand that these bite-sized answers don’t even begin to touch the much larger discussions at play and systemic changes that need to be made.

Some financial experts tout a philosophy that you should aim for no credit score. Not a low credit score. No score at all. The thought is that credit scores are only for people who plan to take on debt and that your score is only important if you want to borrow money.

Typically, this type of thinking is accompanied by a lifestyle of paying off every single cent of debt and using cash to pay for everything up front, including your car and your home.

Is that possible? Absolutely.

I have friends who have done this successfully and are living their best life. And absolutely, never having to borrow money and having the ability to pay for everything upfront is a good thing.

But it’s not a reality for the majority of people.

Borrowing money is a necessity for many people, so having a good credit score is important.

Can people pay off debt and get to the place where they can use cash and not borrow money? Yes. Can everyone? No, not with the way our systems are set up in America. Not with discriminatory practices and a financial system that not only doesn’t offer the same starting line for everyone but, all too often, stands in front of that line, holding some people back. For years. For decades. For generations.

It’s an imperfect system, and not everyone is lining up to fix it. But until there’s widespread systemic change, this is what we’re left to navigate. I’ve included several resources at the end of this post to dig deeper into the topic.

How does a good credit score help you?

There are several ways that having a good credit score is helpful.

“A good credit score can be incredibly valuable for two reasons,” says Michelle Lambright Black, credit expert and founder of “It can help open doors and save you money. With good credit, it’s easier to receive approval of your applications for financing and services from lenders, landlords, utility providers, and more. And when you do qualify for loans, credit cards, apartments, and even new utility services, good credit can help you pay less in the form of lower interest rates and smaller deposits. In many states, a good credit score could even help you save money on your car insurance premiums.”

How much money could you potentially save by having a good credit score? “It’s not overexaggerating to say that good credit could save you hundreds of dollars a month and thousands of dollars a year,” says Michelle. “Putting in the effort to earn and keep a good credit score could make a meaningful difference in your financial life.”

Who looks at your credit score and credit reports?

Lenders and creditors look at your credit reports to determine eligibility for lending and financing and to set interest rates, credit limits, and more. But this doesn’t just apply to potential lenders. If you’re borrowing now, your current lenders are also watching and can and will change your score if they see negative marks showing up on your reports.

Lenders and creditors aren’t the only ones who look at your credit score and credit reports. Your information can also be accessed by:

  • Landlords
  • Insurance companies
  • Utility companies
  • Cell phone carriers
  • Current or potential employers
  • Debt collectors
  • The government

There are some restrictions, and sometimes, your consent is needed to access your reports, but these are situations when your credit comes into play. Having a bad score, limited credit history, or “no score” can sometimes make life more challenging.

What is a good credit score?

I’ve mentioned how having a good credit score can help, but what is considered a good credit score? The most common credit score models have a score range of 300 to 850. A good credit score is considered a FICO score between 670 and 739.

Here is a look at all of the FICO credit score ratings and score ranges.

A table with credit score ranges for each credit rating tier

How to check your credit score for free

There are several ways you can access your credit score and credit reports. Some methods are free, while there are also paid options to consider. You may already have access to your score. Many banks and credit card companies offer free credit score monitoring as a benefit when you open an account. Check your bank’s mobile app to see if you can access your credit score.

Here are some other ways to check your credit score for free. Keep in mind the specific credit score offered varies. Some of these tools come with access to your FICO score, while others come with Vantage Score access.

Factors that affect your credit score

Each credit scoring model is slightly different, but generally, five factors are used to calculate your credit score.

A pie chart with the five factors used to calculate credit scores

Payment History (35%): This part checks whether you’ve been paying your bills on time. Late payments, not paying what you owe, or going bankrupt can hurt your score.

Amounts Owed (30%): This measures how much of your available credit you’re using. It’s better for your score if you’re using less rather than a lot of the credit you have.

Length of Credit History (15%): This one looks at how long you’ve had credit. A longer credit history can be good for your score as long as you’ve used that credit well.

Credit Mix (10%): This considers the variety of accounts you have, like loans or credit cards. A mix of different types of credit can be beneficial for your score.

New Credit (10%): This is about how many new accounts you’ve opened or applied for recently. Opening too many new accounts in a short time can lower your score.

Ways to boost your credit score

1. Make on-time payments

Do whatever you need to do to make your bill payments on time. Even if it’s the minimum amount required. If you have trouble making payments on time, most businesses, utilities, and banks offer automatic payment services. Building a consistent, positive payment history is one of the best things you can do for your credit.

2. Leave current accounts alone

Unless there’s an annual fee you no longer want to pay, keep current credit accounts open. If it’s an old credit card you no longer use, don’t close the account. Stash the card away for safekeeping and let it continue to lengthen your credit age. Also, closing the account lowers your overall credit line, increasing your credit utilization. If they’re not affecting you, leave them alone.

3. Keep your balances low

As mentioned, your credit utilization plays a significant role in your score. Experts recommend keeping your credit utilization ratio under 30%. If you use your credit cards, make sure you have money to pay your full balance each month. If you’re above 30%, stop using available credit until you can get it in check.

4. Pay down your balances

If you have an existing credit card or other debt, the best thing you can do is pay it off. You’re getting hit with expensive interest charges, increasing the amount owed, and minimum payments aren’t going to cut it.

5. Limit new credit applications

If you’re score needs some work, take a break from applying for new credit. Each time you apply, the lender performs a hard credit check, which can cause your score to temporarily drop. Several applications within a certain period are also a red flag to lenders.

6. Use credit-building tools

If you have bad credit or limited credit, it’s challenging to build your credit, especially if nobody will approve you for credit currently. There are some things you can do to build your credit history and potentially improve your credit score.

  • Get a secured credit card: Traditional credit cards rely on a credit check. Secured credit cards require a refundable security deposit. Typically, your deposit acts as your credit line. If you go this route, use it to make small purchases and then pay them off in full each month to start to develop a positive payment history. Card issuers often review your account. If you’ve displayed responsible use of your credit card, they may increase your credit line or upgrade you to an unsecured card and refund your deposit.
  • Use a credit-boosting program: Several companies offer programs that can potentially boost your credit score. Examples include Experian Boost, UltraFICO, StellarFi, Grow Credit, and TurboTenant. Some of these programs are free to use, while others have a free trial period or are paid services. Each program works somewhat differently, but the idea is that they expand the factors that contribute to your score to include monthly bill payments, rent payments, and information from your bank accounts that traditionally aren’t factored into your credit score. With any of these programs, do your research first to see how they affect your credit, which scores they can improve, and any other limitations.


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Boosting Your Credit Score Is Worth It

Improving your credit and financial health doesn’t happen overnight, and it doesn’t happen on its own. Do the work now and put systems in place to actively monitor your money and your credit score. It’s worth the effort.

Resources On Credit And Race

U.S. News & World Report: How Race Affects Your Credit Score

Forbes Advisor: From Inherent Racial Bias to Incorrect Data—The Problems With Current Credit Scoring Models

Money Management International: Why Good Credit is Harder to Achieve in Communities of Color and What You Can Do About It

Board Of Governors Of The Federal Reserve System: How Much Does Racial Bias Affect Mortgage Lending? Evidence from Human and Algorithmic Credit Decisions

Bankrate: How race impacts credit: the history and effect on lending practices

GOBankingRates: Black Americans Are More Likely To Be Denied Credit — Here’s Why, According to Experts

Credit Boosting Programs

Resources for Family Adventurers

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How To Boost Your Credit Score

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