Improving your credit score

I have finally paid off some debt that I never thought would be paid off - and my husband and I are finally on some good financial footing and feeling very positive about things (and because I brought my debt into our marriage, I have felt very, very guilty about it, so I want to do what I can to get the rest of our stuff on track). We have basically our car and a couple of very small balances left from various things, and have a plan to have it all paid off as quickly as possible.

But I can finally start improving my credit score. I did pull a credit report and it’s higher than I expected, but I would like to up it still.

What can I do to improve it? At the moment, all I have under my name is one store card that I pay on time and in full every month. What else can I do to improve my score?

Pay on time every month, every bill. Pay off loans. Don’t have too many credit cards. I bet it will take a while (years) to build your score back up.

Have one credit card that you pay on time. My credit score was in the trash because of some problems about 6ish years ago. I got a small credit card, paid it every month and my score has been steadily rising.

An AmEx seems to really help, my SO got one and his score shot up like 75 points in about 8 months. Although his was pretty high to begin with.

That is good advice in general but, oddly enough, some of it doesn’t really apply to credit scores. You have to keep in mind what they count and what they don’t if you ever need to prioritize. No bills are considered late for credit score purposes unless they are 30 or more days late. You can pay every single bill 29 days late every month and yet have a great credit score. The bureaus don’t even have a way to record lat payments less than 30 days late. Many types of bills won’t ever appear on your credit reports at all in any case. Utility bills like gas and electricity rarely do for example. The credit reports generally look at true credit accounts only. Those include mortgages, student loans, personal loans, and credit cards. That isn’t to say that credit card companies won’t be happy to raise your rate and take on a late fee if you do this but it still won’t affect your credit score.

I say this because many people work themselves into a tizzy by focusing on things that are unproductive for credit score purposes. A good credit score is a great thing but you don’t need to keep it as high as possible at all times. A score of 720 is good enough for the vast majority of uses and pushing it higher and higher won’t get you much.

Agree with everything Shagnasty said, but I still say pay on time, paying bills late is a bad habit to get into. If you decide to mail a check 3 weeks after the due date, who’s to say the letter won’t take 9 days to get there, the USPS sometimes screws up.

That’s interesting. Mine’s actually not much lower than that, so that’s good to know. I was expecting it to be a lot lower than it is, but after a rough time a few years ago, I have paid everything on time and more than the minimum. I haven’t had a late payment in about 3 years at this point.

I think I was thinking it was worse than it was. I’ll just do what I’ve been doing, since that’s obviously helping it go up.

I think you need more than a store credit card. I don’t think they have as much “weight” on your score as a universal card like a regular Visa, Mastercard, Discover or Amex.

Think of it this way - you have one card with one store that has a minimal credit limit. You pay it off every month. This shows the lenders that you can shop at your one store and pay it off. But what about months when you don’t shop at that store? What of the rest of your daily expenses?

If you have a regular card, and put stuff like gas and groceries on it and still pay it off every month (use the same cash you would have used to purchase w/o a card) this gives you a bona-fide credit HISTORY. You are USING credit and it gives your score a bit of a push.

Would you rather give a loan to someone who had documentation of being able to pay off $80/mo at Target or someone who is able to pay off $800/mo all over the world? Which one is a better detail of financial ability?

If you pay for everything in cash, that’s awesome. You have a lot of cash. But when it comes time to calculate your risk as a borrower, it’s not going to do you any good to not have a written history of money management.

We do actually pay for a lot in cash (although we’re not flush with cash by any means). We don’t use a credit card unless it’s necessary for something like car repairs or unexpected home upkeep (my husband has the only one besides my store card). And if we do use it, we pay it off within 2 months.

I think I may see about having my husband add me to his card (as a co-cardholder) if possible, and we’ll rework our budget and just try to use that and pay it off every month. We do earn airline rewards for it, so it’s got a purpose. I think I’m gun-shy about credit cards right now because that’s what originally got me in trouble, and it’s such a relief NOT having that debt anymore, you know?

That right there (in bold) is the secret. Don’t spend more on your credit card than you can pay off.

The important thing to remember about your “credit score” is that it isn’t a score of how good you are at managing money, it’s a score from the credit card company’s perspective on how profitable a customer you will probably be.

This is why you get the seemingly paradoxical advice on how to raise your credit score…take out more loans but pay them off. Don’t be late on payments, but don’t pay off early either. From the credit card company’s perspective, someone who never misses the minimum payment, who keeps paying 18% interest but never pays off the principal is a prefered customer.

But that’s for a credit card company. The ability to get a credit card is not high on the list of priorities for most financially responsible people. You want to get your credit score up so you can get auto loans, home loans, home equity loans, education loans, etc. Those kinds of loans have interest built in, and they’re not the sort of things that lenders make tons of cash on when people default. Giving a credit card to someone with bad credit history IS a good way for credit card companies to make money. But if you are bad at paying your home loan, that’s a whole other ball of wax.

ElzaB - if you are on your husband’s credit cards you get the “credit” from him using it and paying it off. Get your name on it and don’t use it.

My friend/business partner had a credit score in the 600s and wanted to buy a house. I have a fantastic credit rating myself, and I had a card with no balance and a high limit that I was not using. I made him a user on that card and he used it diligently - bought stuff he’d normally paid cash for, paid on time, paid well over the minimum. His credit score went up a ton in one year and he was able to get a great loan on a house. He’s also gotten the card’s APR down to 9.24% from 11-something just by being good.

Also, when my brother and I bought our cars, we had Dad sign the loan and the dealership let us co-sign for him (even though his score was 800). They explained that by being co-signers on the loans, the loans and the payment history would be recorded on both (dad/me, dad/bro) credit histories and credit scores. This is exactly how it worked out - I see the listing and the history on my credit report just like it was my own.

The two above scenarios worked because the higher-score person trusted the lower-score person. Also it helps that my brother and I were more scared to ruin dad’s credit score than to ruin our own by not paying. Same goes for my friend with the credit card.

If your husband is willing to put you as a user on his card, and you are willing to take your copy of the card and put it away and not use it, it could definitely be a boon for your credit score.

Why guess? There are very knowledgeable people whose hobby it is to help you with this.

Creditboards forums

A lot of these answers contain good, general advice. Pay your bills on time, keep your utilization low, etc.

However, Fair Issac (the company that calculates your FICO score, which is what most lenders use) is extremely protective of their calculation of FICO scores. The only place online where you can get a true FICO is from (I think it’s around $10.00 per report).

I don’t believe anyone here probably has access to it, so we can only give general advice.

Just an observation. I’m sure Amex and Mastercard would love it if I did as you said, but I always pay off my entire balances every month and it has been at least a 15 years since I did anything else (wwaayy back when I purposely carried a balance for a few months on the assumption that it would help my credit, but it was a one-time experiment of only a few months). Nonetheless, Amex and Mastercard still periodically increase my credit limits (both are very high when you compare them to my spending habits). That leads me to believe that you can pay off your cards every month and still maintain a good credit rating (I don’t know about the US, but the Canadian free credit reports don’t show an actual numeric credit rating, so I don’t know what exact value mine is).

It may be different in the USA, but in Canada credit scores aren’t really what the banks look at for mortgages, and I had a mortgage officer tell me that just two weeks ago. They have their own way of figuring what they’ll give you and it’s primarily based on four questions:

  1. How much money does this person/couple make?
  2. What do they have to pay now?
  3. What’s the difference?
  4. So can they afford this mortgage?

From my bank’s perspective, whether or not I paid my furniture loan bill late last September is of very little importance. What matters to them is whether I can afford it, because if I can, they’re getting the money. On the other hand, I could be the most conscientious bill payer in the world, but if my income would be stretched beyond a certain danger point by the mortgage I’m not getting it.


Store cards can hurt your credit, as can any other “z” lender (furniture stores, etc). They generally have very small lines. So, by using them, if your $200 credit line has a $195 balance that month, it hurts your credit score (temporarily).

Let me explain.

A portion of your credit score is tied to the available percentage you have left on all of your credit cards – combined. So, if you have a total of $2000 limit on your cards, and have a $1000 combined balance, you have used 50% of your available, and this hurts your score (temporarily).

Actually using credit cards, store cards, lines of credit does NOT improve your credit score. There is nothing on your bureau that shows you pay your credit card off every month. Your credit report is your credit history, correct, but it is also just a snapshot in time. If I pulled yours today, and your credit card balance was up at its small limit, but you paid if off monthly - it wouldn’t show on your report. It just shows your line, balance, and monthly minimum payment amount as of the credit card companies last update. It doesn’t show you sent them 3000 last month. It doesn’t show you pay it off every month (unless they are reporting at a time directly after your huge payment.

Let me give you an example: You see your credit score is 730 when you apply for a mortgage to buy a new house. You get the financing based on that rate, and then two months later, you want to get a new car, so you apply for a car loan, and your score has dropped to 680. WHAT!?!? But i have good credit! Yes, you do, but you just got a new loan. this new loan drops your credit score, as the scoring model needs to see 1) why did you incur new debt, and 2) what will be your payment history on this new debt? Once you pay on the loan for 12-13 months, your credit score will be up to at least where it was prior to getting this loan, if not higher (if all other variables remain constant).

Now, let’s say you didn’t buy a car after getting that mortgage, and waited 13 months, and found out that your score then was 740. You’d be happy, but your credit score in the interim did drop – you just didn’t pull your credit report and see that.

Everything, score-wise, is temporary. It will get better, or worsen depending on what you do (pay or not pay, medical collection accounts, etc). So, here’s my suggestion:

If you have store cards and have had them for more than a year, pay them off but leave them open. If you have major credit cards with no fees, do the same. If you do use them, make sure to try to stay under 40% of the limit. As you keep paying these cards on time (or not using them), your score will improve. As your score improves, they will increase your credit line, which in turn, helps your score.

If you don’t have a major credit card, get one. Just don’t get Discover – who wants 33% interest (if you have to carry a balance)? I wouldn’t consider that a major card, anyway.

That’s the simplest thing you can do to improve your score, hands down.

/16 years in finance, with the last 10 of them as a loan officer – the guy who gives your your mortgage, credit card, and car loan.


You can also ask your lender what your score is.

But again, your score normally fluctuates., and isn’t a true indicator, anyway. I’ve seen 19 year olds with 820 credit scores because of a fluke (or what we’d call a fluke).

“It’s all one big crapshoot, anywhoo…”

Thanks for the insight FourPaws.

At least some loan decisioning algorithms count store cards against you.
Apparently they’re associated with less credit-worthy consumers.

This was my impression, too.
But just from what I’d read.
I understand that the percentage of total credit line used is considered in the score but I thought the type of cards you had was also a factor.

Four Paws are you certain this isn’t the case?