Improving your credit score is often the most important thing you can do if you’re still committed to the New Year’s resolution you made to increase your savings account. When you have a good credit score, banks will trust you more, giving you access to better rates on your credit cards–that interest is costing you. You also might be eligible for lower deposits, application fees, and even insurance rates. In other words, a better credit score saves you money you can add to your bank account.

Commonly used FICO scores range from about 300 to 850. If your score is 700 or above, you’re  in the “good” range. That means you’re considered “prime” and will generally qually for most loans (depending on your assets).  An excellent score–around 750 or above–will get you the best interest rates. Anything below 650 is considered problematic by most lenders. 

In fact, when it comes to paying off your mortgage, an excellent score can save you more than $10,000 in interest over 30 years.  The average score hit 704 this year, an all-time high, but if your score has room to improve, industry experts have some tips on how you can increase it in the new year.


Rod Griffin, director of consumer education and awareness at Experian, says paying late is the No. 1 reason people’s scores drop. “There is no quick fix.” And it’s not just credit card payments you have to worry about. Rent, utilities and other bills can make or break your score, too.


You should also try to keep your credit card and low balances low, experts say. The best way to do that is to pay off your debt and spend less with credit cards. It’s as simple as that. 

As a rule of thumb, experts say you should try to keep your utilization rate–your balances relative to your credit limit, below 30 percent. If you can get it lower, that’s even better!

If you just got your first credit card and you’re trying to build good credit for the first time, it may take a little time to reach the “prime” lending range. “Credit scores are used for a lot more reasons than people realize,” Griffin says. So be sure to check your score regularly and take a responsible approach to how you’re swiping.


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