The Ultimate Guide on How to Build Good Credit (even if you’re starting from Scratch)

A good credit score is important for success in life. When you’re just starting out, though, the credit bureaus don’t know whether you’ll be responsible or not, so they err on the side of caution by giving you a low score. This makes it harder for you to take out a car loan or get a credit card.

Fortunately, the formula that determines a credit score is not a mysterious secret. Once you know what the credit bureaus are tracking, it becomes easier to quickly build up your score.

Use our tips to start building up good credit.

Learn About Your Credit Score

Your credit score is based on a variety of factors. According to, the breakdown looks like this:

  • 35 percent of the score is based on payment history. On-time payments bring your score up; late payments bring your score down.
  • 30 percent is based on your debt load. When you have a high amount of debt relative to the amount of credit you have available, it depresses your score. Reducing debt increases your score.
  • 15 percent is based on the length of your credit history. The longer you’ve had credit, the easier it is for credit bureaus to gauge what your behavior looks like. There’s not much you can do about this except get older.
  • 10 percent is based on whether you have new credit lines available. Your score dips every time you get a new credit card or loan.
  • 10 percent is based on the “mix” of credit. Credit bureaus like to see that you can handle different types of credit.

As you can see, the two things that you have the most control over play the biggest role in determining your score. If you’re able to manage those two things, you’ll be ahead of the game.

Order Your Credit Report

You need to be aware of what creditors see when you apply for credit. You can get a free copy of your report at, but it won’t show the actual score. The report should list all of your credit accounts, including student loans, credit cards, mortgages, and auto loans. Under each account, you’ll see how much you owe and whether you’ve been making payments on time.

Most people who have never had credit before assume that their credit report is blank. That’s usually true, but scammers sometimes use a child’s Social Security number to start a new credit profile. Since the child isn’t using his number, he doesn’t discover this identity theft until years later. Even if you’ve never applied for a credit card or loan, it’s a good idea to order your report to be sure that no one else has used your Social Security number.

Fix Any Mistakes

Look for mistakes in your report. Some of the most common ones are:

  • Credit accounts you didn’t open
  • Incorrect loan amounts or credit limits
  • Closed accounts showing as open
  • On-time payments marked as late

If you find anything like this, you can resolve it by contacting the credit bureau or by contacting the creditor. The Federal Trade Commission has detailed advice on doing this, but it’s often as simple as writing a letter or making a phone call. Once you’ve done this, check your report again to be sure that the errors are gone.

Get Some Credit

If you don’t have any credit, it’s time to start applying. Look over some of the current offers for first-time credit cards. Ideally, you want something with a relatively low interest rate and no annual fee. It’s usually easy to get approved for a store credit card, but you can also try to get the more traditional Visa or MasterCard.

If companies are turning you down because of your low credit score, you may need to apply for a secured credit card. In this case, you’ll have to give the company a deposit in order to get the card. That deposit becomes your credit limit. It’s not an ideal situation, but it may be necessary to build up your credit. Once you have a higher credit score, you can apply for better cards.

Use Your Credit

Simply having credit cards isn’t enough to increase your credit score. You need to use the credit responsibly. Make a few small purchases each month, then pay off the entire balance when you get the bill. You can even make payments the day after you make the purchase if you don’t want to wait. By doing this, you’ll avoid interest charges while showing the credit bureaus that you are able to use your credit responsibly.

Some people believe that you have to carry a balance in order for the activity to “count,” but this is just a myth.

Pay Bills on Time

Since timely payments play such a big role in determining your credit score, you’ll want to stay on top of things. Pay all of your bills as soon as you get each notice, or pay all of them at the same time each month. Your credit score should go up a little each month by doing this.

If you’ve made late payments in the past, don’t fret. The information your report lasts seven years, and creditors care more about your recent history than the past. Eventually, those late payments fall off the credit report.

Automate Your Payments

Go even further by automating your payments. Most creditors will allow you to set up your account to automatically take out payments on a specified date. This works especially well with installment loans like a car payment or student loan because you pay the same amount each month. When it comes to credit cards, you can set up automatic payments for the full amount due or the minimum amount, but you have to make sure the money is in your bank account. The easiest way to avoid insufficient funds is to schedule the payment on the day after payday.

Get Rid of Your Debt

Since the debt load is the other big piece of the puzzle, you’ll want to work hard to reduce or eliminate your debt. Paying off your debt requires focus. You’ll probably even have to make a few sacrifices. Debt reduction is beyond the scope of this blog post, but keep these tips in mind:

  • Make a budget to track your expenses.
  • Always pay more than the minimum due on your credit cards.
  • Reduce frivolous spending and apply that money toward debt.
  • Don’t incur more debt while trying to pay off your debts.

As your debt decreases, you should start to see an increase in your credit score. Use this as motivation to keep going.

Ask for a Credit Limit Increase

On the flip side, you can also reduce your debt ratio by asking for a credit limit increase. With a current credit card limit of $1,000 and a balance of $850, you’re using up 85 percent of your available credit. That looks risky to creditors. If the credit card company were to increase your limit to $2,000, though, you’d only be using 42.5 percent, even though you owe the same amount. That percentage isn’t great, but it’s still better.

This method may not work for those who have a low credit score, but it’s definitely something you can try once the score starts to increase.

Find Some Balance

The credit bureaus like to see you using different types of credit – installment loans, retail credit cards, and traditional credit cards. While you wouldn’t necessarily want to buy a house or a car just to have an installment loan on your report, it’s good to mix it up when you’re able. Retail stores often give you big discounts for using their credit cards, and you won’t pay extra if you pay the full balance off each month. Plenty of other credit cards offer rewards such as cash back. If you’re worried about being tempted by having too many cards, simply keep one of each type.

Partner Up

If you’re an authorized user on someone else’s credit card, their good credit score can rub off on you. This is dangerous territory because the person is ultimately claiming responsibility for any purchases you make. It’s not something that you should ask of a friend or even a sibling. However, if a spouse wants to help you increase your score or if you simply want to consolidate your accounts to make life easier, it’s an easy way to start building up some history.

Of course, the opposite is true as well. When your spouse adds you as an authorized user to his or her account, their score is going to take a slight dip as well. Be mindful of this if you will soon be applying for mortgages or other big purchases together.

Monitor Your Credit Report

Don’t let your efforts go to waste. Once you’ve started the process of building up your credit score, keep track of your report. You’re entitled to a free copy of the report from once per year. Check it each year for mistakes.

If you want to take things even further, look into services that track your credit score on a monthly basis. Your credit card or bank may offer this service for free, but you can also get it through sites like or Sometimes, the score they show isn’t exactly the same as the ones that each of the three credit bureaus has, but you can definitely pay attention to the trends. Seeing your score go up a little bit each month can be motivating. Discovering a sudden drop may indicate an error on the report.

Keep Plugging Away

Unfortunately, you can’t get good credit overnight. Creditors need to see consistent patterns of good behavior over the years. The good news is that as long as you make on-time payments and keep your debt in check, you should see your score continue to rise.

The Quick DIY Guide to Improving Your Own Credit Score

There are plenty of reasons to think about improving your credit score. A higher credit score makes it easier for you to take out loans, manage repayment, engage in transactions, and enjoy a greater degree of financial freedom.

But while there are plenty of reasons to improve your score, most people are unsure of how to go about it.

Your credit score can seem like a hard figure to understand at times. And because problems with your credit in the past can make it difficult for you to improve your score in the present, many people assume that some scores are beyond salvageable.

While everyone’s situation is different, it is possible to improve your own credit score by following a few simple steps.

Though they may seem basic, exhibiting these good habits in perpetuity can make it easier to improve your credit score.

Monitoring Your Balances and Paying Them Off

A poor credit score is often the result of small mistakes piling up over time. In many cases, letting the balances of your cards get too high for too long can lead your credit score to suffer. This means that to improve your score you should do the opposite.

While some people struggle to handle credit issues because their score has caused them financial issues in the present, monitoring your balances is still the first step to getting things under control.

Even if you can’t reduce your balances by much, getting them down over time is still better than simply letting them build up.

Resolving outstanding balances quickly means more than just paying off your cards over time. It means making fewer charges on fewer cards when possible.

Even if you make multiple small-to-medium sized purchases on multiple cards, outstanding balances can affect your credit score.

Understand the Value of Good Debt

When many people think about debt, they picture something that will always impact their credit score negatively.

Even though negative items will disappear from your report after 7 years, many people consider debt to be something that they want taken off their credit report as soon as possible.

But in some cases, debt can actually help improve your credit score. Provided the debt was paid off in a timely manner, having a record of it can come in handy.

These types of simple but consistent payments over time can work wonders for your credit score. This is why timeliness can sometimes play a bigger role than amounts when it comes to helping you boost your credit score.

Making Payments on Time Consistently

Paying off outstanding balances can certainly help your credit, but consistent payments in small amounts can sometimes be a better solution (when possible).

Obviously, balances from the past may cause you problems, but ensuring you can pay all current bills in a timely manner allows you to slowly but surely improve your credit score.

Even if you have a bit in your savings and are comfortable letting some current bills go late if it means handling old debts, you should be aware that something as simple as a history of consistent payments can be the key to bringing up your score.

A bad history of payments can cause your score to suffer. Credit scores are meant to prove you are reliable, and timely payments on a regular schedule can help prove this as well as anything.

Even if the payments are small, making sure you don’t miss deadlines can put you on track for better credit in the future.

What is a Good Credit Score?

Everyone who has ever looked at their credit score knows it is important to keep that figure at the right level. When your credit score is too low, you may find that life is difficult. Your ability to get loans at reasonable interest rates can be affected and this could inhibit your ability to go to school, make large purchases, and even get a job.

But while everyone wants to improve their credit score, where exactly should you be aiming? If you’ve had problems with your credit in the past, you may struggle to raise the number. If you are looking to get your credit score to a good level, what is the right range to seek?

Understanding How Score Ranges Rank

If you’re going by FICO scores, the applicable range of credit scores is usually around 300-850. Within this range are several brackets, and your precise score is often less important than what range you fall in. After all, these scores can fluctuate for many reasons, so getting in a good bracket and developing good habits to stay there is what most people aim for.

Scores in the range of 300-579 are generally considered to be poor. Those who have scores in this range may be required to pay more interest on loans or leave deposits for certain transactions. They may even be disqualified from certain types of activity due to their score.

Scores between 580-669 are generally considered to be in the middle of the spectrum. Those who fall into this range are classified as subprime borrowers. Going beyond this level can help a person enjoy the perks that come with higher credit.

The Higher Credit Scores: How High is Good Enough?

As you begin to enter the 670-739 range, you’ll be among a portion of people who are considered to have good credit when compared to the average person. Those with a score in this range can enjoy better repayment terms and more reasonable interest rates on loans and credit applications.

A score between 740-799 is very good, and this is where you’ll really start to see better-than-average rates from lenders and a great degree of financial freedom. Anything above this mark is considered to be excellent.

So, what is a good credit score? If possible, it is worth aiming between 600-750. This is reasonably achievable even if you’ve had some credit problems in the past. A score within this range can help you get some good repayment terms and take advantage of your record of responsibility.

7 Tips for Consolidating Your Credit Card Debt

Consolidating credit card debt is a great way for a consumer to lower their monthly payments and potentially pay off outstanding credit bills faster.

However, it is only successful when it is done correctly.

While using a consolidation service is ideal, there are other ways to consolidate debt without paying outrageous third-party fees.

7 Tips for Consolidating Your Outstanding Credit Card Debt

  1. Consider Balance Transfers

If you have a credit card with no balance and a lower interest rate, see about transferring other credit card balances to a single card. Credit Karma advises to do some research and make sure there is no introductory interest rates that will skyrocket after the transfer.

  1. Be Aware of the Fees

If you opt for a balance transfer to consolidate credit card debt, be sure there are no fees associated with that transfer. Some cards charge to transfer from one bank to another, but then also charge an annual fee on top of interest. Some cards could cost as much as three to five percent of the balance transferred, which will add up.

  1. Consider a Personal Loan for Private Consolidation

Calculate your total credit card debt and see if you can qualify for a personal loan to consolidate those debts. Go to a local financial institution and explain that you are seeking a loan for consolidation. Applying in person may increase the likelihood you will be approved despite high outstanding debts.

  1. Consider How Much You Can Pay Each Month

Most importantly, you must consider how much you can afford to pay. Obviously, you are consolidating because you cannot afford your current payments; therefore, you need a lower monthly payment.

You must be serious about paying off your debt. Nerd Wallet recommends calculating it all out and seeing if you could pay off your credit cards within five years. Also, they only support credit card consolidation if the total unsecured debt is less than half of your gross income.

  1. Focus on High-Interest Debt First

High-interest debts are the hardest to pay off and take the longest. Therefore, prioritize your debts based on the high interest first; not the highest balance. If you can only transfer or cover certain debts with a private consolidation loan, the high-interest ones should be tackled first to avoid paying extra in interest.

  1. Do Not Add on To Your Existing Debt

While you are paying off your debts and consolidating, do not accumulate more credit card debt. Your credit cards should be put away, and you should rely on your cash for expenses.

  1. Keep Your Accounts Open Even if Paid Off

Once you have paid off a credit card (either by transferring or through a loan), keep that credit card account open. Having an open and paid off credit card account may help raise your credit score. If your score is already damaged from excess debt, this is even more crucial.

Bottom line, play it smart when you are consolidating credit card debt. You have options out there, but you must make sure you can afford it, it makes fiscal sense, and you do your research first.

11 Credit Repair Myths that You Believe but Shouldn’t

Everyone desires a perfect credit score, and you are no different.

There is nothing wrong with wanting to repair past credit mistakes and improve your credit health.

After all, a good score opens many doors. From better interest rates on mortgage loans to higher credit limits to finding the car you want at a price you can afford.

Great credit has its rewards.

However, when you venture out to repair your credit, you might be tempted to give in to those common myths floating around. Some give you a false sense of hope, while others douse your dreams. Therefore, as an educated consumer, you need to dispel those myths and make sure you are working with the right information.

Myth 1: Opting Out of Credit Offers Improves Your Score

According to Janna Herron at, too many consumers assume that if they opt out of credit offers, they will have fewer inquiries on their credit report. Too many inquiries can lower a credit score, but not devastate it.

Those offers you receive in the mail are considered soft pulls, and they do not affect your credit score. If you are tired of the endless junk mail, opt out, but do not assume that will build your credit.

Myth 2: Closing Out Credit Cards Will Improve Your Score points out how all too often consumers close credit cards to improve their score. The mistake, however, is that you are removing open credit lines. When you have large available credit lines and small balances, your score improves.

Also, closing out old cards can reduce the amount of positive credit history you have on your report.

So, keep the cards open. You do not have to use them, but you should at least keep them open to keep your score up.

Myth 3: A Higher Income Leads to a Higher Credit Score

Your income has nothing to do with your credit score. In fact, your income is not reported on your credit report what-so-ever.

Myth 4: Once a Debt is Settled, It Removes Itself from Your Report

This is profoundly untrue. Debt, including ones with negative payment histories, will remain on your credit report for as much as seven years from the date of the infraction. If you have a judgment or bankruptcy, those will stay in place for as much as ten years.

Myth 5: Credit Scores Take a Long Time to Lower

It only takes a few months of negative activity to lower a credit rating. Multiple collections, late payments, and charge-offs will do more harm than good. Also, it takes longer to repair a credit score than it does to bring it down.

Myth 6: You Only Have One Credit Score

The reality, you have multiple scores. It depends on which system pulls that score, and each credit scoring model will come up with a different score.

Myth 7: Paying Off Delinquent Accounts Improves Your Score

It will help, but it does not boost your score. Instead, the delinquency remains on your credit report for those seven years. However, the zero balance and showing it is paid in full shows prospective lenders you are serious about your debts.

Myth 8: Paying with Only Cash Improves Your Credit Score

You need to use credit to build credit. If you do not show positive payment history, revolving accounts, and any activity, your score will not increase. Without any activity, a company cannot gauge your ability to pay a debt. Therefore, using cash-only could harm your chances of credit in the future.

Myth 9: The Number of Credit Cards You Have Hurts Your Score

People are inclined to close out credit card accounts because they assume too many cards can hurt their score.

This is not necessarily true. If credit cards have a relatively small balance or no balance at all, they will not hurt a score. The only time they will is when they are first opened, but that slight dip returns.

In fact, some credit card experts have dozens of cards under their name to have a better FICO score, per Time.

Myth 10: Credit Reports are Accurate

This is untrue. There are numerous inaccuracies on a credit report. That is why each year you should request a free one to review it for errors. Correcting those errors could raise your score.

Myth 11: Any Negatives on Your Report Keep Your Score Low

While a negative account on your credit report hurts your score, the more time that passes and the more positive credit history you add, the less that negative activity impacts your score.

Recent information, according to, is weighed heavier than past information. So, a negative report from five years ago will have little impact when you have had excellent history the last two years.

Bottom line, know the facts before you attempt to repair your credit. By understanding those common myths and misconceptions, you can help raise your score faster and more efficiently.

How to Effectively Dispute Errors on Your Credit Report

Everyone knows that having good credit is important for a number of reasons. Your credit report contains important information about you and it affects the ways you can do business with others. When there is an error in this report, it can have serious consequences.

Credit reporting companies can share your information with lenders, employers, insurers, and many other organizations and parties.

credit errors

When you have errors on your credit report it can make it harder for you to get loans, find jobs, and even trade with others.

Errors in your credit report can even lead to serious legal liability in some cases. This means errors of this type should be addressed as soon as possible. Though the credit industry may seem complicated, there are effective ways to dispute errors on your credit report.

How Do Credit Report Errors Occur?

Errors on your credit report can cause you stress, and most people want to avoid these types of problems altogether if possible. In some cases, small errors can end up on your credit report due to data entry mistakes. In most cases, these are minor and can be corrected rather easily.

There are also more serious errors which can occur. For example in the event of identity theft, you may be billed for transactions you never made. When this happens, your ability to borrow, trade, or rent can be seriously impeded.

However, these kinds of errors occur, handling them in a timely manner is important. But most people aren’t familiar with the specifics of credit reporting companies and their practices.

But the first step to realistically disputing an error on your credit report is by making the issue known to the credit reporting company.

Make the Issue Known as Proof

Credit reporting companies and the organizations that provide them with information are required to abide by certain laws.

The first step toward handling an issue with your credit report is to report the error to the company in writing. By law, they are partially responsible for the error.

Proof should also be included to support your written complaint. Original documents shouldn’t be submitted, but rather copies should be made for this aspect of the process.

It’s also a good idea to send a copy of the report itself and highlight any issues which you may be inquiring about.

While certain issues with your credit report are minor, others can cause you serious problems when they go unresolved.

For this reason, it is wise to send your letter by certified mail with a return receipt requested.

Report the Dispute to the Information Provider

The organizations that provide information to credit reporting companies are also partially responsible for these types of errors.

While you should always report an error to the credit reporting company, it is a good idea to report it to the organization that gave them the information as well.

While the credit reporting company must also report the error to the information provider, reaching out to them yourself ensures they have all the proof needed to see that an error has been made.

Following up regularly can help ensure that your dispute is resolved in a timely manner. Bureaus and information providers usually have to address error disputes within 30 to 45 days.

Review Your Reports and Dispute Errors on Your Credit Report Immediately

An error on your credit report can seriously impact your finances and your life. It’s a good idea to review your reports regularly to catch any errors that may come up. Addressing these quickly with the proper information can help you avoid stress and potential liability.

Stay tuned to CreditRepairXP for more helpful credit tips.

25 Ways You Can Improve Your Credit Score in the Next 30 Days!

If you ever plan to make a big purchase that will require a loan, such as a home or a new vehicle, then you will have to approach a lender to see if you qualify for one. The lender will check your credit history to determine your eligibility and your interest rate. If you have a good credit score, then you should have an easy time getting approved for a loan with a low-interest rate.

A low credit score, however, will make it tougher to get a loan. Any loan approved for people with low scores will very likely have a high-interest rate that adds a considerable amount to what they will pay by the end of the loan term. This is why it is important to improve your credit score and make it as high as possible and keep it there.

Here are 25 of the best ways to Improve your Credit Score.

Credit Score

1. Check your FICO credit score.

It’s tough to know whether you are improving your credit score if you don’t know what it is. You can buy a report of your credit score or hire a credit monitoring service, but you can also simply check with your credit card provider or lender. Most of the time, if you have an existing loan or a credit card, they can easily provide you with your score.

2. Order your free credit reports.

According to federal law, you can obtain one free copy from each of the three major credit bureaus each year. You should order these to check for errors that may be hurting your score. Such errors can include a misspelled name, accounts you don’t recognize, late payments you didn’t make, closed accounts that are listed as open, etc.

3. Report errors on your credit reports.

If you find errors in your report, then you need to report them immediately to have them corrected. Credit bureaus are legally obligated to correct mistakes in your reports, and this can significantly raise your credit score if the errors are serious.

4. Check your VantageScore, too.

The FICO score is the most common algorithm used by lenders to calculate your creditworthiness, but there is another called VantageScore that was created jointly by the three credit reporting bureaus (Experian, TransUnion, and Equifax). Some lenders will use this method instead, so it’s good to know this score, too, and see how it compares.

5. Pay delinquent debts first.

Past-due debts have a very negative effect on your score, and the longer they are delinquent the worse it gets. You probably know if you have any delinquent debts, but if you aren’t sure, you can verify them on your credit reports. Start paying on the oldest debts first, and then work your way forward.

6. Negotiate for goodwill adjustments.

Even one missed or late payment on any bill or credit card can negatively impact your score. You can call the credit repair companies if you make such a mistake and ask them to stop reporting the late or missing payment to prevent it from damaging your score. They may not agree to do it, but you won’t know unless you ask.

7. Pay on cards that are close to maxed first.

Once your payments are up to date, you can put your focus on the cards that are closest to maxed out. Racking up a balance that is close to or at your card’s credit limit hurts your score, even if you pay it off in full, so high balances that carry over month to month need to be paid down to raise your score.

8. Decrease credit utilization as quickly as possible.

Credit utilization is the percentage of credit you are using out of the total amount you have available. The higher your utilization is, the harder it will negatively impact your score. Paying your debt down as quickly as possible will dramatically lower your utilization and boost your score.

9. Use tax returns to help reduce debt.

A tax return can be a great opportunity to pay off a large part of the debt to help boost your score and reduce your utilization.

10. Keep your utilization at 25 percent.

By using only a quarter of your available credit, you can keep your debt manageable while still building a credit history to help your score.

11. Ask for a credit increase.

If your utilization is high, even when you are paying the debt off in full, the solution may be to ask for a higher credit limit. Just remember that an increased limit isn’t a license to spend more credit.

12. Open a new credit card.

Another way to lower utilization is to open a new credit card to increase your available credit, and then use it sparingly. Make sure not to open more cards than you can manage, however.

13. Manage balance transfers carefully.

A balance transfer can be a helpful way to pay down credit balances by getting a lower, or zero, percent rate of interest for the next year or so. It’s important not to rely on balance transfers too often because you can end up with too many credit cards to manage, and if you don’t pay the balance off in your interest-free period you can end up worse than before.

14. Stop applying for store credit cards.

Applying for any new line of credit will ding your credit score, including store credit cards. Signing up for these on a whim for a 5 percent discount can end up really hurting your score, so keep them to a minimum.

15. Avoid impulse credit purchases.

Impulse buying can really rack up a credit card, and it can cause irresponsible utilization. Make sure to carefully consider purchases and buy strategically to manage credit utilization.

16. Don’t open too many credit lines at once.

Applying for multiple lines of credit at once, including personal loans, credit cards, mortgages, etc., will drop your credit score down. Space out credit applications to keep the negative effects to a minimum.

17. Diversify the types of credit you use.

It looks good for your credit score to use more than just one kind of credit. In addition to a few credit cards, you can also take out a small personal loan or buy some furniture with installment payments, but only if they fit your budget.

18. Don’t close your credit cards unless it’s absolutely necessary.

Your credit score improves as the age of your credit accounts increases, and closing credit cards can ding your score by reducing the age of your accounts. If you have to close some cards, try to close the newer ones and keep the older ones.

19. Consider a secured credit card.

This is a credit card that uses the money you place in an account as a security deposit as collateral. You can get a credit line that is only as large as your deposit, or you can get a larger line based on your income and ability to pay. Secured credit cards can be a safer method of building credit.

20. Become an authorized user.

Find someone with an existing credit account in great standing and become an authorized user on their account. This can help you take advantage of their great credit history, but make sure it’s someone you can trust.

21. Pay balances off every month if possible.

If you are using your credit responsibly then you should be able to pay the balances off each month in full. However, sometimes this is a challenge so just make sure you are paying as much as you can each month.

22. Pay more than the minimum.

If you can’t pay the full balance off each month, make sure you pay more than the minimum. This reduces the amount of interest you will pay and looks better for your score.

23. Make credit card payments more than once a month.

Making multiple payments a month can help reduce the average daily balance, which lowers the amount of interest you pay and helps your credit score too.

24. Pay all of your bills on time.

Your credit score is affected by all of your financial obligations, not just your credit lines. It’s important to pay every single bill you have, on time and in full. A history of timely bill payments slowly but surely increases your score.

25. Don’t stop using credit.

Once you have your credit under control, don’t stop using it completely. If you stop using credit you won’t have anything to go on your report. This can actually hurt your credit score. Keep using credit, but do so responsibly.

Using these methods you can improve your credit score, in both the short and long term. A solid credit score will help you make big, important purchases throughout your life, so learning to manage your score now can help you for years to come.