The first day on campus hits different. You have a half-full coffee and a head full of questions. Where's the next class? Did tuition get paid? Can I afford another latte?
An excellent credit score is a key indicator of financial responsibility. It shows lenders your ability to manage money wisely and make sound financial choices. A high score can unlock access to more affordable loans, lower monthly payments, housing opportunities, and more.
However, achieving and maintaining an excellent credit score is easier said than done. There’s no quick fix to boosting your credit score. But you can take steps to improve it gradually. Consider these six tips to help you achieve a better credit score.
1. Pay your bills on time
It might seem obvious, but your payment history is the single most important factor in determining your credit score. Paying your bills late (or not at all) is a definite don’t and can significantly lower your score. Once your score goes down, rebuilding it back can take time and consistent effort.
Want a credit hack? Make things effortless and use autopay features to ensure you don’t miss payments. Don’t forget to review your credit card statements and bills before paying. It’s also helpful to set a monthly reminder a few days before each bill is due.
2. Reduce your credit utilization ratio
Your credit utilization ratio is the amount of credit you use compared to how much is available to you. Although there’s no universal threshold, a ratio of 30% or lower is a good rule of thumb. What does that mean? Basically, if you have $20,000 of available credit, try to keep your usage below $6,000—or even under $3,000, if you can swing it.
Accepting offers of increased credit can instantly lower your credit utilization ratio. However, now that you have more credit at your disposal, it’s important to avoid the temptation to overspend.
3. Improve your score with smart use
Credit cards offer a range of benefits, from building credit to earning rewards to protection from unauthorized purchases. While some people choose not to use them, responsibly managing your credit cards can actually help improve your credit score. It shows lenders that you know how to consistently and responsibly use your card and pay your debts, which makes you a better candidate for future credit needs.
Worried about overspending? Try only charging fixed expenses, like monthly subscriptions or utilities, to your credit cards. Pay the balance in full by the due date each month, and you will maintain a better credit score.
4. Monitor credit score changes
We can’t think of anything worse than having your credit score brought down by fraudulent credit card charges. Be sure this doesn’t happen and check your statements every single month so you can spot any charges that don’t seem right.
If in your sleuthing efforts you do spot something suspicious on your statement, make sure to dispute the charge. It’s also a good idea to get a free credit report for a more comprehensive look at your credit card usage and signs of possible fraud.
At Golden 1, your account includes access to Credit Sense, so you can quickly check your credit score and get updates to your credit report. Plus, you can sign up to get immediate alerts that tip you off to major changes.
5. Build your credit as an authorized user
For anyone new to credit, becoming an authorized user on someone else's credit card account is a great way to start building your credit history. This approach allows you to benefit from the primary cardholder’s responsible credit behavior. However, not all financial institutions report authorized user activity to credit bureaus, and some may have age-related restrictions. Before relying on this strategy, it’s a good idea to check with the card issuer to understand their reporting practices.
6. Limit credit inquiries
Limiting the number of credit inquiries can help maintain a healthy credit score. Each time you apply for new credit, whether it’s a loan, credit card, or financing offer, a hard inquiry is added to your credit report. While a few inquiries over time are normal, multiple inquiries in a short period can signal risk to lenders and may temporarily lower your score. Being selective about when and where you apply for credit helps preserve your score and demonstrates responsible financial behavior.
Join Golden 1 Credit Union
Feeling overwhelmed by the prospect of improving your credit score? We’re here for you. Get started by:
- Applying online
- Calling 1-877-465-3361
- Visiting a Golden 1 branch near you
