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  • Timothy Iseler

6 Tips for Raising Your Credit Score

Maintaining a strong credit score can end up saving you hundreds or thousands of dollars per year – perhaps tens of thousands throughout your life – through access to things like lower mortgage rates, the highest rewards credit cards, and even better car insurance rates.

Though each credit reporting agency keeps their formulas secret, the factors that impact your credit score are well-known. The tips below can help you improve your credit score – and even push for a perfect 850!

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How FICO credit scores are calculated:

Payment history: 35%

Amounts owed (credit utilization ratio): 30%

Length of credit history: 15%

Credit mix: 10%

New credit: 10%

Tips for increasing your credit score:

1. Check your credit report regularly and dispute inaccuracies

It’s actually not uncommon to find errors on your credit report. You can check your credit report for free once per year with each of the three credit bureaus at the official government website, If you find something fishy, dispute it with the credit bureau. (Tip – set reminders to check your score with each of the three credit bureaus throughout the year.)

2. Autopay is your friend

Payment history is the largest factor in determining your FICO score, and setting up autopay can be a lifesaver for maintaining a strong payment history. Always make sure you trust the institution and have a way of disputing any incorrect transactions that sneak through before establishing autopay.

3. Reduce your debt in order to improve your credit utilization ratio

Your credit utilization ratio is the amount of revolving credit (i.e., accounts like credit cards that let you borrow money up to a limit and pay it back over time) currently in use divided by the total amount of revolving credit available. Reducing the amount of debt will lower the ratio – and lower is better. If you’re paying significant interest on credit card balances, consider using a balance transfer card with 0% interest for a set amount of time while you work to pay off the debt.

4. Don’t close out old credit cards – as long as they don’t have an annual fee

This one surprises some people, but closing an unused credit card can actually lower your credit score by impacting both your length of credit history and your credit utilization ratio. Even if you don't need the card anymore, consider keeping it open as long as there’s no annual fee.

5. Ask for a credit limit increase

The other half of the credit utilization ratio is the total amount of revolving credit available. Increasing your limits will improve that ratio. You can simply call up your credit card company to ask for a higher credit limit! It's one of the most low-effort ways to help your credit score.

6. Add to your credit mix

Managing more than one type of account can help your credit score, which can help you access new loans in the future. But make sure you have a reason for taking on new debt: we never recommend adding more debt for the sole purpose of building your credit score.

There is one "extra credit" tip that requires more legwork on your side, but can prevent unauthorized loans or credit cards from being opened in your name: a credit freeze. A credit freeze restricts access to your credit report, so new credit accounts cannot be opened while the freeze is in place. (This will not, though, impact a background check for a new job, apartment rental application, or access to insurance.) If you decide to place a freeze on your credit report, make sure you do so with all three ratings agencies and keep diligent records – you will need to temporarily lift the freeze each time you need to apply for new credit. Take it from me: a misplaced password can quickly turn into a lot of time on hold when you need to call one of the agencies directly!


Timothy Iseler

Iseler Financial, LLC | Registered Investment Advisor | Durham NC

(919) 666-7604

Iseler Financial is here to help you build the strong foundation you need to achieve your goals and dreams. As both advisor and accountability partner, we help identify current strengths and weaknesses, clarify and refine your long-term goals, and prioritize understandable, manageable, and repeatable actions to bring long-term financial well-being. Reach out today to take the first step.

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