5 Simple Ways to Boost Your Credit Score Kirsten Thuringer Updated On: December 29, 2022 • 3 Minute Read Credit Basics Let’s face it: Credit scores are a confusing concept. Most people don’t know much about their credit score aside from the fact it’s a three-digit number that controls nearly every financial aspect of their lives. Your credit score affects your ability to obtain a loan, the interest rates you pay for those loans, and even your insurance premiums, cell phone plans, or cable and internet prices. It’s crucial to understand the basics of a credit score. If your number isn’t as high as you’d like — or if you’re simply looking to maintain a strong rank — there are several easy ways to improve your credit score. How a Credit Score Works While everyone has a credit score, relatively few people know how it’s calculated. The short answer? It depends. You have multiple, slightly different credit scores. Each lender has a distinct scoring model that produces results based on the type of credit you’re seeking. In other words, there’s no single number you can track as your definitive score. Here at CreditSoup, we use the VantageScore 3.0 scoring model provided by TransUnion. This method was first introduced in 2006 and was developed by the three major credit bureaus: TransUnion, Equifax, and Experian. The VantageScore 3.0 model incorporates a broader set of information, which allows it to score millions more people than other models. In addition to providing a more accurate credit score, this model can help people who might be new to credit or who are rebuilding their credit. About 20 of the 25 largest financial institutions in the U.S. rely on VantageScore credit scores to make credit-related decisions, underscoring the importance of tracking this measure on an ongoing basis. If lenders are looking at your VantageScore, you should probably monitor it. Whether your credit score is hovering around 300 or 850, it’s important to be responsible with your finances. Thankfully, there are plenty of relatively easy things you can do to improve your score and make sure it stays in tip-top shape. Here are five tactics to make your credit score something to envy: 1. Don’t Close Old Accounts Let’s say you have had a credit card for 20 years, but you never use it. Shutting down that account is probably a great way to clean up your credit, right? Wrong. Closing old accounts lowers your available credit, increases your credit utilization ratio, and lowers your credit age. 2. Lower Your Utilization Rate Credit utilization rates significantly affect your credit score, so it would be wise to use a little bit less of your overall limit. As a rule of thumb, try to use no more than 30 percent of your credit limit. Anything more could harm your credit score. Pay off your credit card debt as you go rather than maxing out your cards before paying them off to keep your credit score from taking a hit. 3. Pay Bills on Time Paying bills on time is one of the easiest ways to boost your credit score, even if it’s just the minimum payment each month. Pay careful attention to due dates because even one late payment can tank your score. Better yet, set your accounts up for automatic recurring payments to ensure you never miss a deadline. 4. Limit New Credit Applications It might be tempting to apply for a credit card when your favorite retailer is dangling an offer for cardholders, but taking on a new loan or credit account can hurt your score in two ways: inquiries and credit age. Credit inquiries and credit age might seem negligible as they only account for 10 percent and 15 percent of your score, respectively, but they can add up. If you’re frequently adding new accounts, the frequent inquiries will quickly whittle away at your score. 5. Keep an Eye on Your Credit Report Identity theft and credit card fraud can destroy your credit. The quickest way to catch them before they become a serious problem is regularly monitoring your credit report to be certain nothing seems off. Heck, even credit companies sometimes make mistakes. It’s a good idea to routinely check for any errors, so they can be corrected sooner rather than later. Are you interested in learning more about your credit score? Answer a few simple questions, and get your free credit score courtesy of CreditSoup. Follow Us Here! #CreditScore Editorial Disclaimer: Information in these articles is brought to you by CreditSoup. Banks, issuers, and credit card companies mentioned in the articles do not endorse or guarantee, and are not responsible for, the contents of the articles. The information is accurate to the best of our knowledge when posted; however, all credit card information is presented without warranty. Please check the issuer’s website for the most current information.