745
VERY GOOD
1. Pay your bills on time
Your payment history makes up the largest part—35 percent—of your credit score. And even small slip-ups can lower your score by a lot.
BOOST YOUR SCORE:
Always make at least the minimum payment by the due date. Late payments and missed payments can lower your score, while more serious problems such as judgments or bankruptcy can stay on your credit history for years.
You can set up payment reminders and automatic payments within your accounts so you never accidentally miss a due date. Just make sure you have enough money in your accounts to cover your bills. If you’re a Bank of America customer, you can do all this through Mobile and Online Banking.
Pay electric bill by the 5th
2. Keep your debt manageable
The amount you owe is the second most important factor in your credit score. Try to pay down your outstanding balances to increase your score.
BOOST YOUR SCORE:
Having credit accounts and using them isn’t a bad thing, but it’s typically better to carry less debt overall. If you’re close to maxing out your accounts, you may be overextended—and considered more likely to default. Try to keep your credit card balances to less than 30 percent of your available credit. That means if you have a credit card with a $10,000 limit, you may want to keep your balance below $3,000. Even better, pay your bill in full every month.
3. Don’t close old accounts
Your score considers the length of your credit history, along with the ages of your different accounts. It also considers when you used them last.
BOOST YOUR SCORE:
In general, a longer credit history means a higher score, so it can make sense to keep older credit cards active, even if you don’t need them. But think twice before opening new accounts, since they lower your average account age. That said, even people who are newer to credit may have high scores, depending on the rest of their report.
4. Have a good mix
Lenders like to see that you can manage multiple loans at the same time.
BOOST YOUR SCORE:
It probably isn’t effective to open new accounts just to try to pump up your score. But in general, it’s good to have a mix of credit cards and other kinds of loans—such as a mortgage, an auto loan and student loans—that you pay on time.
5. Be strategic about applying for new credit
Research shows that people who open several credit accounts in a short period may be higher credit risks than those who don’t, according to FICO.
BOOST YOUR SCORE:
It’s generally a good idea to avoid opening new accounts too often, since that triggers an inquiry. Checking your own score has no impact, though. You can even sign up for a credit tracking service that continually monitors your score, or some banks and card companies offer this service for free.
If you always pay on time and handle credit responsibly, you’re already on the right track. Learn more about your credit score and how it’s calculated so you can better manage your financial life.
