5 quick tips to improve your credit health

Young woman sitting near a window learns 5 quick tips to improve your credit health Young woman sitting near a window learns 5 quick tips to improve your credit health Image:

In a Nutshell

You can ignore your credit, but your credit won’t ignore you. A great way to improve your credit health is to pay your bills on time, diversify your credit mix and refrain from closing your oldest accounts.

We generally make money when you get a product (like a credit card or loan) through our platform, but we don’t let that cloud our editorial opinions. Learn more about how we keep this compensation from affecting our editorial views.
Advertiser Disclosure

We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.

Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

Think of your credit as if it’s a fingerprint.

We each have our own unique credit history. Yours may comprise an entire constellation of financial decisions, ranging from the big (an auto loan or a mortgage) to the small (making your credit card’s minimum payment on time).

Whether you have good credit, bad credit or need to build credit from scratch, most of us have room for improvement. There’s no fast lane to an excellent credit score, but responsible financial habits can go a long way toward boosting your credit health.

On that note, here are some dos and don’ts to keep in mind while trying to build credit.


5 quick tips to improve your credit health

  1. Do pay your bills on time
  2. Do pay down your debt
  3. Do diversify your credit mix
  4. Don’t open too many new credit cards at the same time
  5. Don’t close old credit cards

The dos

Do pay your bills on time.

What lenders care about, above all else, is the likelihood that you’ll pay back your debts. Doing so on time, every time, proves that you’re reliable and should boost your overall credit health.

That’s why it’s important to make on-time payments on all your accounts. That includes not only your credit card, but also your rent, utilities and even your cellphone.

Late or missed payments can significantly harm your credit scores. If you have trouble keeping track of your bills, consider setting up automatic payments or payment reminders.

Of course, nobody’s perfect. If you forget or accidentally make a late payment on one of your accounts, it’s not the end of the world. Call your lender as soon as you discover the mistake and ask for forgiveness. Then pay the bill and bring the account current.

How late payments can affect your credit

Do pay down your debt.

Your credit utilization ratio compares the amount of debt you owe to the amount of credit you have at your disposal. Lenders want to make sure you’re not borrowing more than you can afford to pay back.

Most experts recommend keeping your overall credit card utilization below 30 percent. The easiest way to stay below that number is to pay off your credit card balances in full each month. A lower credit utilization ratio suggests that you can use credit responsibly, so it may be correlated with higher credit scores and better overall credit health.

6 ways to lower your credit card utilization

Struggling to pay off debt? Consider cutting down on your interest payments by transferring high-interest debt to a single credit card by balance transfer. A balance transfer credit card may offer 0 percent interest on your balance transfer as an introductory offer for a set period of time, so you can pay more money toward your principal. Just be aware that a balance transfer fee may apply.

On the other hand, you could also improve your credit utilization ratio by asking for a credit limit increase or opening a new card and maintaining a low balance.

Do diversify your credit mix.

Your credit mix refers to the various types of accounts included in your credit reports.

While it probably won’t make or break your credit scores, lenders typically like to see a mix of revolving credit accounts (i.e. credit cards) and installment loans, such as mortgages, auto loans and student loans.

The more you diversify the money you borrow, the better. Of course, it’s not a good idea to take out a loan you don’t need just for the sake of adding some extra color to your credit mix.

The don’ts

Don’t open too many new credit cards at the same time.

Be careful not to open too many credit cards within a short time period.

Every time you apply for a credit card or loan, it generates what’s known as a hard inquiry, which stays on your credit reports for about two years and may have a small negative effect on your credit scores.

Too many hard inquires in a short period of time may set off a red flag for lenders, as it suggests you may be scrambling for cash or getting ready to add on a ton of debt.

This doesn’t mean you should never apply for new credit. Just be sure to spread out your applications.

Don’t close old credit cards.

The length of your credit history is a significant factor in most credit scores. Some credit scoring models may consider only the average age of all your accounts, while others may also factor in the age of your oldest open account.

You risk shortening the length of your credit history by opening too many new credit cards at the same time or closing your oldest credit cards.

We know it can be tempting to get rid of those old cards you no longer use, but hear us out. Closing an account doesn’t just affect the overall age of your credit history. It could also lower your available total credit and increase your credit utilization ratio.


If you’re looking to improve your credit health, knowing your credit scores can be a good start.

A credit score is actually a pretty simple concept: It’s a number based on the information within your credit report, and it helps lenders determine how likely you are to pay back your loans.

Different credit scores may be based on different scoring models, but the major factors typically include your credit card utilization ratio, payment history, age of credit history and any derogatory marks on your reports.

You can check your VantageScore 3.0 credit scores from TransUnion and Equifax for free at Credit Karma. Credit Karma also offers free credit reports from TransUnion and Equifax, plus tools to help understand them so you can determine which areas you can improve.


Bottom line

The best way to improve your credit health is to treat it like a long journey rather than a short race.

Building credit takes time. We may crave instant gratification, but credit scores don’t work that way. They’re meant to show an overall picture of your financial health, so it makes sense that they’re not susceptible to a quick fix here and there.

Our best advice? Stay patient and work on developing good habits that last. With a bit of effort, you should see your credit health improve over time.


Editorial Note: The opinions you read here come from our editorial team. While compensation may affect which companies we write about and products we review, our marketing partners don't review, approve or endorse our editorial content. Our content is accurate (to the best of our knowledge) when we initially post it, but we don't guarantee the accuracy or completeness of the information provided. You can visit the company's website to get complete details about a product. See an error in an article? Use this form to report it to our editorial team. For questions about your Credit Karma account, please submit a help request to our support team.