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4 Ways to Responsibly Build Your Credit And Improve Your Credit Score

Some tips on how you can build your credit score easily

A credit score is one of the most important factors to gauge your financial situation. You need good credit to get approved for loans, credit cards, and even houses.

Higher credit also gets you much lower interest rates on loans if you intend to borrow. But building credit is a tricky thing. There is no one easy trick to build your credit. However, there are a few ways you can build your credit responsibly.

Ways to Build Your Credit Score

Review Your Credit Score Reports

To improve and build your score, you should first know what may be working against your credit. You should get a copy of your credit report from major national credit bureaus like Equifax, TransUnion, and Experian.

Review your report thoroughly and understand what you might be doing wrong (and right!). Also, look out for errors in the report, and if there are any, contact the credit reporting agency to fix the issues. Some things that affect your credit score and you should check out on the reports include a history of on-time payments, late or missed payments, collections, and high credit card balances.

Pay All Your Bills on Time

Paying back your loans and credit card bills on time is the most important thing you can do to build your credit score. At least paying the minimum amounts on time is enough to keep your credit healthy. Try setting up automatic payments with your bank to help you stay on schedule.

Not all payments are listed on your credit report and don’t affect your credit score. But nonpayment and late payments of over 30 days are all reported to the credit bureaus and will significantly impact your score.


Pay Credit Card Balances Strategically

Make payments and use credit utilization strategically. Credit utilization is the percentage of your credit limit that you use at any moment. Financial experts recommend using lower than 30% of your credit limit. Excellent credit users are said to utilize only 7% of their credit limits.

Always try and keep your credit balance low. This is especially true when the billing cycle is coming to an end. Try to pay down the balance prior to the end of the billing cycle, or try and make regular payments throughout the month to keep your balance low.

Ask for Higher Credit Limits to Improve Your Credit Score

Getting a higher credit limit can help you increase your credit utilization. When you get a higher credit limit and you keep your balance around the same levels, it will improve your credit. As long as your balance levels are kept the same levels as before getting approved for a higher limit, your credit score should start improving.

Higher limits are very easy to obtain. This is even easier if your income level has risen or if you have a positive credit history.


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