Five Ways to Improve your Credit Score

Your credit score can make or break some of your long-term goals. Learn the five factors that affect your score, and how you can improve it.

Everyone has numbers they know by heart – from birthdays and Social Security numbers to addresses and phone numbers. But there’s another number that is just as important that you might not know—your credit score.

Your credit score can influence your credit card interest rate and credit line, insurance rates, ability to buy a house, secure a loan or even get a job.

Lenders reference credit scores when gauging the probability of a borrower defaulting on a loan. Reliable borrowers are less likely to default on payments – and more likely to have favorable terms when they do borrow.

In this case, what you don’t know can hurt you—but if your score isn’t where you want it to be, you can follow some simple steps to improve it.

5 ways to improve credit score

Check Your Reports

Your credit score is based on information in your credit reports at the three major credit bureaus: Equifax, Experian and Transunion. These three bureaus track things like loan payments and balances, credit use, length of credit history, late payments, bankruptcy, foreclosures and repossessions.

Your score will reflect the information in your credit reports – whether it’s accurate or not – so it’s important to check your reports regularly. You can check your reports at the three bureaus for free once every 12 months at

If you notice errors, contact that credit bureau to learn how to correct them before you make any financial decisions.

Learn Your Score

Once you’ve reviewed your three credit reports, check your credit score.  Your free credit report does not include a credit score. You can purchase a score directly from the credit reporting agencies and scoring companies and many lenders now provide access to your current score with no fees.

Up Your Score

Paramita Bandyopadhyay, PNC’s general manager for consumer credit cards, says young people and people who are new to the country don’t always have a credit score. If that’s your situation, it is important to obtain credit (if you haven’t already).

“PNC is one of few banks that allows customers to use a co-applicant while applying for a credit card. Applying with a co-applicant can help people get credit while they are attempting to build a credit history,” she said. “Start building your credit history, use it responsibly, and most important, always pay your bills on time.”

Bandyopadhyay also offers these 5 tips to improve your credit if your score is lower than you’d like:

  1. Pay bills on time – Be responsible and always pay your bill on time. One way to make sure your payments are on time is to set up automatic payments or set up electronic reminders.
  2. Keep your balance low – Just because you have a credit card doesn’t mean you should use it for every purchase. Take note of your credit limit and stay well below it. If you consistently carry a high balance, it could drop your score. Credit card balances, if not paid every month, are loans, so don’t take out a loan you can’t afford. Your total loan payments including mortgage, car loan and student loans should leave sufficient money every month to pay for essentials. As a rule of thumb, try to keep your payments at less than 50 percent of your monthly take-home pay.
  3. Maintain your history – Credit scores are based on experience over time.  The more experience you have with getting credit and paying your bills on time, the more information there is to determine whether you are a good credit risk.  Consider keeping your oldest credit card accounts open, even if you don’t use them frequently. The older the average age of your accounts, the better your score may be.
  4. Number of applications for credit – Your credit score drops for a while every time you apply for a loan or open a new account. A store discount or points bonus for opening a new card might sound appealing, but keep your long-term goals in mind.
  5. Balance types of credit – You can demonstrate your responsibility with a variety of types of credit, like credit cards from banks, store accounts, car loans, student loans, installment loans, mortgage loans, etc. If you have applied for credit cards or car loans with your family members, try to get the next card or loan in your own name. Having a healthy mix can show that you can handle different types of loans and multiple payments.

Keep in mind that while your credit score is an important indicator of whether you will repay borrowed money, a good score doesn’t entitle anyone to a loan. Your income, financial assets and other debts also are major factors in whether you’re approved.

Learn more credit score myths and facts »

Paramita Bandyopadhyay
Paramita Bandyopadhyay says obtaining credit and using it responsibly may help lead to better financial opportunities

The best way to improve your credit score is to develop consistent, responsible spending (and bill-paying) habits.

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