how to make better credit score

How to Increase Your Credit Score?

Your credit score is an important piece of information to know – it can make, or break, loan applications, and good scores can help you obtain the best interest rates possible. Rather than cross your fingers and hope for the best, let’s dive into what a good credit score looks like and how you can achieve one.

What is a Credit Score?

Stated by a credit repair Houston expert, your credit score is compiled by three major credit reporting agencies: FICO, TransUnion, and Experian. While each agency’s scoring will differ, the most common scoring system is used by FICO.

In general, your credit score will be based on the following:

– Payment History 35%

– Amount Owed 30%

– Credit History 15%

– Types of Credit 10%

– New Credit 10%

Your payment history and the amount you owe both, by far, contribute the most to your credit score. This is because your credit score is used to determine how reliable you will be to pay back a loan.

Credit Scores by Number

Now that you know what contributes to your total credit score, it’s essential that you understand what constitutes a good score. The FICO system breaks the scoring range into the following:

– Excellent = 800-850

– Very Good = 740-799

– Good = 670-739

– Fair = 580-669

– Poor = 300-579

When it comes to credit scores, the higher the number, the better your score. Those in the very good and excellent ranges are the most likely to receive the best credit card offerings, the lowest interest rates, and the best home loan options.

If you have a “good” score, you’ll still be able to apply for credit cards and loans, but you won’t be able to access the best interest rates.

For those with fair scores, you’ll likely need a co-applicant on loans, and your interest rate will be poor.


If you have a “poor” credit score, you may be rejected altogether on credit card and loan applications.

Improve Your Score

If you already have a great score, congratulations! If you want to keep it there, or you need to improve your credit score, read on.

Your credit score is determined by the categories listed at the beginning of this article. To maintain or improve your credit score, you need to focus on those areas.

Payment History:

Consistently pay off at least the minimum for all your loans and credit cards. Missing a payment can severely impact your credit score, and missing a payment for more than a month can cause even greater impact.

You could see your score lower anywhere from twenty to one hundred points for missing a payment.

Amount Owed:

Keep your overall debt below 30% of the total amount you can borrow. If you have a total credit limit of $10K, be sure to keep your total debt below $3K to improve your score.

How to Get A Better Score

Having a high credit score is beneficial for obtaining the best lines of credit and loans with low-interest rates. To get your score into the best range possible, it’s essential to pay your bills on time and keep the amount you borrow low.

By maintaining these two items, you can easily maintain and even improve your credit score. Now that you know what goes into a credit score, do you need to work on improving yours?

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