The Complete Credit Score Guide – Improving Your Credit Score Has Never Been Easier!

Are you looking for ways to start improving your credit score? Check your credit score with Credit Sesame for free! Whether you want to believe it or not, your credit score can play a major role in your family’s life. While you shouldn’t go crazy and completely obsess over improving your credit score, it is important…

Michelle Schroeder-Gardner

Last Updated: December 28, 2023

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Are you looking for ways to start improving your credit score?

Check your credit score with Credit Sesame for free!

The Complete Credit Score Guide - Improving Your Credit Score Has Never Been Easier! Improving your credit score is something that more people should focus on. You can use it to your advantage in life, and it's simple!Whether you want to believe it or not, your credit score can play a major role in your family’s life.

While you shouldn’t go crazy and completely obsess over improving your credit score, it is important to learn more about them due to the impact they may have.

Your credit score can influence the interest rate you receive on a loan, buying a home, finding a rental home, attaining certain jobs, your insurance rates, and more.

Even though your credit score can impact your life in a big way, that doesn’t mean it’s hard to improve your credit score. Yes, it can be easy to wreck your credit score, but it can be easy to improve your credit score as well.

Due to this, I believe a credit score can be used to a person’s advantage.

Below is my complete guide to credit scores, so you can improve your credit score, receive your annual free credit report, learn how to use your credit score to your advantage, and more.

Check your credit score with Credit Sesame for free!

Here is how to start improving your credit score:


What is a credit score?

A credit score is a three digit number showing others your creditworthiness, and is often used as an indicator of how risky you are.

There are three main credit bureaus, which is why you may occasionally see different numbers. The main three (Equifax, TransUnion, and Experian) calculate scores depending on the information they have about you, and your file may be slightly different at each of them.


What is a good credit score?

Lenders and people who are checking your credit score usually have varying opinions about what a good credit score is.

In general, though, a good credit score is usually 720+. The higher your number, the better your credit score.


Is it easy to damage your credit score?

Improving your credit score usually takes a little more work than it does to damage your credit score.

You may be hurting your credit score if:

  • You have a high utilization rate. Keeping your balances below 20% of what you can borrow is important. For example, if your credit card limit is $1,000, try not to have a balance over $200. Lenders like to see a low utilization rate as it shows that you are not maxing out your debt.
  • You cancel credit cards that may be helping your credit history.
  • You pay your bills late or not at all.
  • You never check your credit report and have errors listed.

Read more at These 4 Mistakes May Be Holding You Back From A Good Credit Score.


Can my credit score impact buying a home?


This is a big reason why improving your credit score is so important.

  • Your credit score can impact whether or not you are approved for a home loan.
  • Your credit score can impact how large of a home loan you are given.
  • Your credit score can impact the size of the down payment you are required to put down.
  • Your credit score can impact your interest rate.

Read more at How Your Credit Score Impacts Your Home Buying Process.


Why is improving your credit score important? What else can it impact?

There are many instances in which your credit score and/or credit report may be looked at, and sometimes they have nothing to do with a loan. It is important to work on improving your credit score, because you never know when you may need it.

Plus, it’s something you can personally control, so why not work on improving your credit score?

Home and car insurance – If you have home or car insurance, your rate may be calculated on a factor you didn’t know about – your credit score. If your credit score isn’t good, then you may actually be paying more because companies consider you to be riskier.

Employer – This may be shocking to hear, but there are some employers out there who will check your credit report (with your permission). Industries that often check your credit report include those dealing with financial services, chemical, and defense. I recently read a statistic that around 30% of companies will check a potential new hire’s credit report before making a hiring decision.

Renting a home – If you have decided you don’t want to own a home, do not think you have escaped having your credit history checked. Your landlord will most likely check your credit history. They will want to know if you pay your bills on time or if you have ever skipped one completely. This will say a lot about you as a renter, whether you want to believe it or not. If your credit history is not up to their standards, you may be denied the rental altogether, you may be asked to pay multiple months at once, or you may be asked to find a co-signer just in case you fail to pay your rent.

Credit cards – If you don’t care about credit, then you probably will not care about this one. However, if you want a credit card, especially one with a good rewards system in place, then you will want to work on improving your credit score. The good reward credit card offers are usually only available to those with good or excellent credit scores.

Loans (home, car, etc.) – If you apply for a loan, your credit score and credit history will definitely be checked. Before you are approved for a loan of any sort, the lending institution is going to thoroughly check your financial history so they don’t end up losing money on your loan.

The interest rate you receive – A good credit score can mean you qualify for a good interest rate, and a bad credit score may mean that you get a very high rate. I have seen a 24% interest rate for a car loan for someone before! A higher interest rate can mean paying thousands of dollars extra, so it is always best to work on improving your credit score.


How can I check my credit score and my credit report?

My favorite site for checking my credit score is Credit Sesame. Credit Sesame makes it extremely easy to check your score and both me and my husband have active accounts.

You can also receive one annual free credit report from the three main credit bureaus mentioned above. Yes, this means that you get one from EACH, so three each year. I recommend spacing it out so you can get one every 4 months. You can read more about this here.


What makes up a credit score?

There are five categories that make up your credit score. Your payment history and amounts owed equate to 65% of your credit history, but don’t forget the others as they still have an impact.

If you want to work on improving your credit score, you will want to keep the below credit score breakdown in mind:

  • 35% Payment History. Your payment history has the biggest impact on your credit score. This includes if you pay your bills on time, if you have missed a payment, if any of your bills have been sent to collections, and so on.
  • 30% Amounts Owed. This is the next largest category when it comes to your credit score. This includes your balances, your utilization rate, and more.
  • 15% Length of Credit History. The age of your accounts come into play here. This is why it’s usually a good idea to keep a credit card that you’ve had for a long time. I still have a credit card I opened when I was 18. It has no rewards, but it improves my average account age. However, only do this if you know you won’t go into debt.
  • 10% New Credit. This category includes things such as how many hard credit inquiries you have and how long it’s been since you last opened a new credit account. It is important to remember that checking your own credit score does NOT impact this category as long as you receive your credit report from a company that is authorized to give you your credit report.
  • 10% Credit Mix. This includes the type of accounts you have, such as whether or not you have credit cards, a mortgage, car loan, and so on.

Check your credit score with Credit Sesame for free!


So, how can I improve my credit score?

After reading all of the above, I’m sure you’re wondering how YOU can increase your credit score.

Improving your credit score is not extremely difficult. Once you realize what can impact your credit score, you can make relatively easy changes that will begin to improve your credit score.

Here are my general tips for improving your credit score:

  • Make sure you pay all of your bills on time.
  • Regularly check your credit report. There is a chance that mistakes may pop up on your credit report, and this may be hurting you. If you find an error, you should fix it as soon as possible.
  • Keep your balances and utilization rate low. I recommend spending less than 20% of your available credit.
  • Ask for your credit limits to be raised.
  • Pay before your credit card balance is reported. Even if you pay your credit cards in full each month, your balances are still reported. To improve your credit score, you should pay your credit card in full before your balances are reported.
  • Keep your credit card accounts open if it makes sense (if you think you’ll go into debt with them open or if the annual fees aren’t worth it, you may want to think about closing them instead), so that you can lengthen your credit history.
  • When shopping for a loan, apply for loans within a short period of time instead of over several months.

This advice gives you the opportunity to improve your credit score so you can begin to use it to your advantage. Like I always say, though, make sure you are wise when it comes to your loan and credit card habits as you don’t want to go into debt.

Improving your credit score can be worthwhile, but taking on debt to do so is not.

Check your credit score with Credit Sesame for free!

Do you know what your credit score is? How has your credit score impacted you?

Filed under:

Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. Michael Belk

    it is very important to pay bills early because I went through a short sale. I expected my credit to get worse, but instead my credit improved mainly because I paid my bills early.

  2. Amy @ DebtGal

    Thanks to one of my credit cards, knowing and following my credit score is very easy now. The last time I had to use it was when we switched propane providers. In order to not have to pre-pay for propane deliveries, they had to check my score.

    1. Yes, this is a great positive!

  3. I usually don’t worry too much about my credit score, I just know that it’s good. But since we don’t plan on taking out any loans any time soon, it’s not too important to me. But you did remind me that we need to raise our credit card limit. We recently decided to pay for most things with our credit card instead of debit card and we might be using over the 20% you mentioned.

    1. It’s easy to improve, so my thinking is always “Why not?”

  4. I have a love hate relationship with credit. I hate that it’s a measure of debt (b/c I’m all about being debt free), but I do like how you can monitor your reports and identity through it. And as a financial planner, obviously we do it and encourage it because most people use financing.

  5. Great info here, Michelle. We have a great score, but these days I’m much more concerned about our overall financial situation and our goal of becoming debt free.I am always amazed that our credit score stayed in the mid 750’s in spite of a 65% DTI and a ridiculous amount of credit card debt.

    1. Thanks!

      I feel the same way. We churn credit cards like crazy and somehow we still have high scores.

  6. Stefanie OConnell

    My credit score definitely helped me get my current apartment. My income was a little low for what they wanted, but a having a long history of on time, in full payments made up for it.

  7. I know what my credit score. It’s much better than it was last year at this time. I will make sure that it continues to grow.

  8. I like how warm and fuzzy this post made me feel. I love the positivity. Credit doesn’t have to be a scary topic. I’m in the mid 700’s and can’t wait ’til I join the 800+ club!

  9. I would strongly suggest keeping your oldest credit card accounts open even if no longer use the cards. The reason is because the length of credit history is the one factor that is the hardest to improve.

    You do need to make sure the card is active or sometimes the bank closes it on you. Buy a coffee every 2-3 months on them. Another trick is use the card for a monthly service that you have i.e. netflix. Set up recurring payment with the card and then put it away at home. Don’t keep it in your wallet and you never have to see the card.

    1. Yes, I agree. However, if a person is not good with credit cards, it’s usually best for them not to have them at all.

  10. Wow, I could have used this article when I was still in college and wondering about getting a credit card! I was looking for another way to build credit and everyone keep telling me to avoid credit cards at all costs. Now I do have one and I use it responsibly. (They don’t have to be these terrible things like people say!).

    I didn’t know about only using 20% of your available credit. Learned something new!

  11. Brittney@ Life On A Discount

    This is a great synopsis of credit scores! I am really fortunate that I have built and maintained a strong credit score, but I do have lots of family and friends who have not been so lucky. I will be sharing this with them and hopefully it can help pave the way for them to build stronger credit as well.

  12. Great article! I haven’t checked my credit report in about 7 years. Oops. Thanks for the reminder! Recently my Discover credit card has made my credit score available on their website. It’s in the upper 700’s. I can’t remember the last thing my credit score would have been checked for. Maybe when I was leasing my apartment 5 years ago? It’s been awhile!

  13. Michael

    I had very little credit aside from student loans about two years ago. Got my first real credit card around that time. I have five now with one having around a $20K limit. I pay them in full every month. Across the board my credit score is in the high 700s to low 800s. Most of my purchases go on credit for the protection and rewards. Credit is a great tool as long as it’s not abused.

  14. Fehmeen

    I also read that if you wish to improve your credit score, you should use your credit card frequently to make small purchases, like a pack of gums, and repay the credit card bill before the due date. This shows creditors that you can handle debt responsibly

  15. Great article! You wouldn’t believe some of the questions we get about credit scores. One time.. we had a user tell us that their low credit score was caused by their email account…

    I will definitely be sharing this great resource. Thanks Michelle!

  16. What a great article! I remember when I was young I barely even knew what a credit card was or how the process worked. I wish I had articles like this back in the day to walk me through the process and giving me tips. Thanks for the post!

  17. I learned the hard way credit is everything.