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Simple Ways to Improve Your Credit Score

Feeling overwhelmed by mounting debt? Here's how to heal your wounded credit score.

by Firstly Staff | August 5, 2021
<p>Close up of a fine-looking middle aged man using his mobile phone and his credit card, shopping online</p>

As your credit score improves, you’ll have more flexibility in many areas of your life.

The Squeeze

  • If your credit score isn’t where you’d like it to be, you’re not alone. The average American has a personal consumer debt of $90,406
  • Understanding the information used to determine your creditworthiness is the first step to rehabilitating your credit score.
  • Paying bills on time, keeping older accounts open and lowering your credit usage percentage are sure-fire ways to give your score a boost. 


Whether facing rising medical bills, fewer work hours — or everything else that comes with caring for kids and helping parents, the Sandwich Generation’s financial well-being has taken a hit during the pandemic.

Are you feeling overwhelmed by mounting debt and worried about its impact on your credit score? You’re not alone — and importantly, there are things you can do right now to protect your rate.

Here’s how to get started.

Understanding your credit report

When it comes to improving your credit score, it’s best to focus on the information used to determine your creditworthiness. Begin by assessing your situation before your start rehabilitating your credit. You are allowed a free copy of your credit report from each of the major credit reporting bureaus once a year— Equifax, Transunion and Experian — take them up on it.

Your report may not show your exact FICO score, but it will show you all of the factors that impact credit. Look for errors and dispute them right away. Getting incorrect payment delinquencies removed, closing down unnecessary retail store accounts, or correcting other mistakes will give your score an immediate lift.

Several factors affect your FICO credit score. The most important is your payment history, accounting for 35 percent of your total credit score. If you have late payments, missed payments, or delinquent accounts, your credit score is likely to take a hit. To turn this around, commit to making to pay your bills on time. Every month you make timely payments on all of your accounts, your score will get a positive bump up. 

Next up: your credit usage percent. For instance, suppose you have two credit cards with a credit limit of $1,000 each. If you have $800 charged on each card, you’ll have used $1,600 of $2,000 available credit or 80 percent. The higher your credit usage, the lower your credit score will be. This factor represents 30 percent of your credit score, so any move to pay off debt and not take one anymore will improve this factor.

Your length of credit history accounts for 15 percent of your score. If you have had a particular credit card for a long time, consider keeping it open even after paying it off to influence this credit history factor.

Your credit mix represents 10 percent of your score, reflecting the kinds of credit you have — such as a credit card and a car loan. The more diversity among your credit use, the better. In other words, don’t live off your gas credit card

Finally, 10 percent of your score is based on recent credit applications. Recent credit checks on your account will impact this factor.

As you pay off your credit card debt, you may feel the urge to close your accounts — if only to reduce the temptation to use them. Unfortunately, this move may hurt your credit score by keeping your resulting debt usage percentage high. 

Create a repayment plan

Next, look at how much credit you’re using and how much is available to you. If your credit score is low, it’s time to create a plan to tackle your debt. Here are three simple strategies to consider:

Pay on time. One way to avoid being late is to make half of your payments every two weeks, rather than waiting to pay the whole bill once a month. Using this method will result in 26 half-payments. You’ll end up making 13 total payments in a year rather than 12 monthly payments, which puts you ahead of the game.

Create a snowball. If your debt seems overwhelming, start small. Pay minimums on everything but your smallest balance. Put all of your extra money toward that small debt. Once you pay that one off, add that payment amount toward your next smallest debt, along with the minimum you were already paying. Keep working your way up to your debt ladder as your financial momentum grows. 

Consolidate and lower rates. There are a couple of ways to do this, either through a personal loan or a balance transfer to a new credit card offering an introductory 0 percent APR for a specific period. Like all such maneuvers, this move comes with risks, so know for sure what fees, timing, and other rules will apply here — and how you will put them to use to bring down your debt.

Don’t close unused credit cards

As you pay off your credit card debt, you may feel the urge to close your accounts — if only to reduce the temptation to use them. Unfortunately, this move may hurt your credit score by keeping your resulting debt usage percentage high. 

Instead, pay off the cards and remove them from your wallet. Place them in a safe spot in your home or a safety deposit box. That way, you won’t have access to use the card, but the available balance will help your credit score in terms of your credit usage ratio.

As your credit score improves, you’ll have more flexibility in many areas of your life — from better interest rates on home mortgages to an easier time getting insurance. Step by step, you can get this done. 

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