How to Improve Your Credit Score

January 11, 2023 by Partner Colorado Credit Union

Improving your credit score doesn’t just happen overnight. It takes consistent hard work over time that involves making payments on time and controlling your credit card spending. Here are some tips to help you improve your credit score and start the new year out right.

Review your credit report

The best place to start is by reviewing your credit report. This lets you know where you stand and what areas need work. Whenever you make a loan or credit card payment, a record of your payment history, credit limits and loan balances are kept and reported to one or more of the credit reporting agencies.

There are three major credit agencies—Experian, TransUnion and Equifax. Each one collects and shares information about your credit usage with potential lenders and financial institutions. Normally, your credit report is available every 12 months from all three credit bureaus. However, since the pandemic, online access to your report is still available on a weekly basis for free. Visit to get started. You can also check your FICO® Credit Score through a feature on Partner Colorado’s Mobile Banking App.

According to Experian, the following are the five most common factors that affect your credit score.

  • Payment history (35%)
    Payment history is the factor that affects your credit score the most—it accounts for 35 percent. Missing even one payment can have a negative impact.
  • Amounts owed (30%)
    How much credit you use is also an important factor. If you’re using less than all the credit available to you, that shows your ability to manage money by not overspending. The lower your credit utilization is, the better your credit score will be.
  • Credit history length (15%)
    The length of time you’ve been able to maintain a credit account makes a difference. The longer your credit history is, typically the higher your credit score will be.
  • Credit mix (10%)
    The variety or types of credit you have factors into your credit score. Such as credit cards, auto loans, mortgage loans, etc. This shows how well you manage credit and different kinds of debt.  
  • New credit (10%)
    How often you apply for new credit or loans, plus the number of credit accounts you currently have open can affect your credit score. If you have too many credit accounts open in comparison to your income, it could indicate you’re a higher risk to potential lenders.

When reviewing your credit report, be sure to look for any errors. If you notice an error like an incorrect balance or a loan you paid off that’s still showing unpaid, you can dispute it with the credit agencies. You should also look to make sure all of your personal information is correct, such as name, address, Social Security Number and loan info.

Make your payments automatic

Since payment history makes up 35 percent of your credit score, it’s important to pay your bills on time. As previously mentioned, just one late payment could drastically drop your credit score. If you struggle to remember to make your payments on time, it’s a good idea to set up automatic payments or use Bill Pay so you’ll never be late again.

Pay off debt

The more your debt outweighs your income, the lower your credit score will be. If you can manage to pay more than the minimum payments on your credit card bills or other high-interest debts, this will improve your credit score. Try doubling the minimum payment on a credit card bill. You could also make one extra mortgage payment or auto loan payment each year. The sooner you’re able to pay off debt, the sooner your credit score will improve.

Avoid having too much credit

Just because every credit card has a limit, doesn’t mean you should spend up to your maximum limit. For example, if you have a $10,000 credit card limit, that doesn’t mean you need to charge it to that limit. Set your own limit to make sure it fits your budget. Also, applying for too much credit and having too many credit inquiries can negatively impact your credit score. When you need to apply for a loan, try to do it within several weeks rather than pulling your credit over a longer time frame.

Ask for help

If you’d like more help gaining a better understanding of your credit report and ways to improve your credit score, members can get support from our Partners in Financial Health program. A GreenPath credit counselor will work with you to review your financial situation and develop a personalized plan to meet your needs.

By applying these tips over time, you’ll start seeing your credit score improve.


You may also like

What Affects Your Interest Rate?

Should You Buy an Electric Car?

Why You Should Get Preapproved for an Auto Loan