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5 tips for building your credit score

Personal Finance • September 17, 2019 • Lisa Litant


Learn about what a credit score is and how to improve it.

What you’ll learn

  • What a credit score is
  • The factors that affect your score
  • The best thing you can do to improve your score


A healthy credit score is important if you want to borrow money, whether you’re applying for a new credit card, student loan, or car loan. If you want to build your score, there are some simple rules you can follow.

  1. Understand what a credit score is

    Your credit score is a number—FICO® Credit Scores are the most popular—with a range of 300 to 850. The number helps lenders evaluate how much of a risk it is to lend you money; in short, how responsible you are with your finances. The score is largely based on your outstanding credit, payment history, and public records.

    The higher your score, the more likely you’ll be to qualify for that new credit card or loan—you might even get a better interest rate. Here are a few tips to help you build your credit score, whether you’re new to credit or want to see your score go even higher. Note that some weigh a little more heavily than others.

  2. Pay your bills on time

    It may sound simple, but this is one of the most important factors in how your score is determined. Lenders want to be sure you’ll pay your bills; a payment that’s even a few days late can dampen your score. This doesn’t only cover credit card bills—delayed cellphone, electric, and rent bills can impact your credit if they’re reported to credit bureaus.

  3. Keep your balances low

    It’s best if you pay the entire amount due each month. But if you don’t, try to pay off as much as you can. Just because you have a high credit limit doesn’t mean you should keep your balance up to that limit. It’s a good rule of thumb to keep your total debt lower than the overall credit that’s available to you—below 30%, if possible. The lower, the better. Why? If you get too close to your limit, creditors may think you’re biting off more than you can chew, or that you’re supplementing your income with credit.

  4. Start off with a credit card

    Creditors want to see how you’ve been managing credit. Your credit history shows how long you’ve been using credit, how you’ve handled that responsibility, and how responsible you’ve been. Getting your first credit card can be a good way to start building your credit history. Look for a card targeted to first-timers like you—that’ll help increase your chances of getting approved.

  5. Don’t apply for more credit cards than you need

    Applying for lots of cards won’t necessarily boost your score. You could be tempted to use them (and spend more), plus, a lot of inquiries on your credit report may raise a warning flag to potential lenders.

  6. Keep an eye on your credit report

    So, now that you understand what makes up your credit score, it’s important to check your credit reports—that’s how your credit score is established. There are three national credit reporting bureaus that you should know: Experian, TransUnion, and Equifax. You’re entitled to a free credit report from each of them every year, which you can request from AnnualCreditReport.com. Be sure you check your reports for accuracy and take care of any problems ASAP. The best thing you can do to keep your credit score healthy? Pay your bills on time. Also, be careful not to exceed account limits, and make sure none of your accounts are delinquent. If you take these steps, you can achieve a higher, healthier credit score. And that’s something that money just can’t buy.


Lisa Litant is a content manager at Sallie Mae. When she’s not helping people save and pay for college, she travels, sings cabaret music, and blogs about jewelry.


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Sallie Mae does not provide financial, tax, or legal advice and the information contained in this article does not constitute tax, legal, or financial advice. Sallie Mae does not make any claims, promises, or guarantees about the accuracy, completeness, or adequacy of the information contained in this article. Readers should consult their own attorneys or other tax advisors regarding any financial strategies mentioned in this article. These materials are for informational purposes only and do not necessarily reflect the views or endorsement of Sallie Mae.