How to Raise Your Credit Scores
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Are you two house hunting (or plan to be soon) and want to get the best rates? Here are five effective ways to raise your credit scores!
While your credit score is not the most important (or really accurate) indicator of your financial health, it has a huge impact.
Lenders look at your credit score when deciding what rates you qualify for and if you're looking at a big purchase, like a house, that can mean tens of thousands of dollars (or more) over the life of your mortgage.
One of the best things you can do before you go house hunting (or refinancing) is making sure your score is higher.
Before we get into how you can increase your credit scores, I want to make sure we're on the same page.
How to Raise Your Credit Scores

Many people, including myself years ago, use credit reports and credit scores interchangeably. While they are related they are not the same.
Quite simply, your credit scores are calculated based on what is on your credit report.
Your credit report is a record of your history of payments on your debts and helps lenders determine your creditworthiness.
You have 3 credit reports, one with each credit bureau – Equifax, Experian, and TransUnion.
According to FICO, credit scores are calculated by a few factors, weighted differently:

- 35% Payment History
- 30% Amount Owed
- 15% Length of Credit History
- 10% New Credit
- 10% Types of Credit
Your credit score is a number between 300-850 that each of the credit agencies assigns based on the information on your credit report.
As you can see ine the chart above, there are certain key factors that can help you effectively and efficiently raise your credit score.
You can watch me break them down in this week’s Marriage and Money Tips or check out my take right below!
Review Your Credit Reports
Since your score is based on what's in those credit reports, you better make sure they got it right!
Use Annualcreditreport.com to get your reports from all three bureaus for free every year.
Now what we've done in the past is space things out so we get one bureau's report every four months.
You can also use Credit Sesame to get your report and your credit score through TransUnion.
Automate Your Payments
Your payment history by far has the biggest influence on your credit score.
You want a consistent history of paying your bills on time so go ahead and schedule those payments. Not on the credit card side, but your bank or credit union.
If you're behind on any of your debts, hustle to get caught up.
Avoid Large Balances
While having regular activity on your cards is important, carrying too much debt can make you appear financially strained, so be sure to pay balances quickly.
Don't Immediately Close an Account After You Paid It Off*
Another factor that affects your credit score is your credit utilization ratio, basically how much of your available credit are you using.
If your credit utilization is high, your score will be negatively affected. Lenders like to see low ratios of 30% or less.
Now keep that in mind that's the minimum. Ideally, you should be paying your balances off each month.
Now here's something to seriously consider when you're getting a mortgage and going the traditional route with lenders.
If you've paid off your debt and you're focused on a higher credit score for your mortgage, then keep the account open. At least until after the mortgage.
If you close it, your score can go down, which means your lender will probably offer a higher interest rate.
Once you have your mortgage, you can go ahead and close it.
Your score will be affected, but as I'll talk more about below, it may not matter.
Now if let me mention a tactic that some people use to raise their credit score that can hurt them really bad financially – opening new accounts just so you can raise your score.
Don't do it.
Remember we are looking at raising your score without raising more needless risk or temptation.
Never spend more money just to build your credit – it's a losing game.
Knock Out your Debt
Finally, your goal should be to pay off your debts.
Getting rid of your credit card debt can be a huge win as you're not being sucked into those ridiculous interest rates.
You can get even more freedom and options by paying off your student loans.
Finally, it might take a bit, but can you imagine getting rid of your mortgage?
How would you feel?
That's a great spot to be in, right?
Do Credit Scores Matter When You're Debt Free?
Okay so eventually you're completely debt-free, now you have a choice to make.
With your finances in a good spot and your score too, where do you go from here? How important is your credit score now?
Some couples feel like leaving credit cards behind is the best thing for them. Awesome.
Others may feel like they can use credit cards to get rewards like flights or other perks.
If so, make sure you have a system to pay them off consistently. Here's where tools like Debitize can make things easier for you.
Debitize lets you use your credit card like a debit card so you can earn points & build credit without debt or interest fees.
However you decide to handle your finances once your debts knocked out is up to you.
For us, our credit score is really an afterthought. Chasing after a higher score is not one of our goals.
By staying on top of our finances, it's in a pretty good spot.
Your Take on Credit Scores
I'd love to get your take. How much does your credit score affect your finances?
This post was originally posted April 2018. It has been updated in September 2019.