Financial Habits to Improve Your Credit Score

A good credit isn’t just a bragging point for fancy dinner parties. A good credit score can help you get certain jobs, and it can help you when you’re ready to make big purchases like vehicles and homes. In the pursuit of good credit, many well meaning people make some poor debt decisions. The good news is that improving your credit score isn’t rocket science, but it does take a little time and effort. With these financial habits, not only can you improve your credit score, but you can boost your wealth as well.

Pay Off Bad Debts

Paying off old debt or bad debts is a good way to boost your credit score. This includes anything that’s late or that has been in collections. Paying off a bad debt helps improve your debt-to-income ratio and shows that you paid off your bills. Additionally, once you pay off debts in collections you can submit a request to remove that from your credit report. That way it no longer impacts your score.

Pay Off Debts

Paying off all debt, not just the bad ones can improve your credit score. While there is some debate on how much to focus on, the fact is that having less debt means you’ll have more money in your wallet to save, invest, and have fun with. When you pay off debts, especially in revolving credit lines, you’ll show creditors you are trustworthy which means that they can feel safe giving you a good credit score. There are people who use their credit cards for instance to pay all their bills every month and then they pay it off. This habit can improve your credit score greatly.

Apply for New Debt Sparingly

If you’re constantly applying for credit cards, your credit score will be impacted. This can make it more difficult to get a quick personal loan, a mortgage, or a car loan when you need it most. Applying for new debt all the time can also create challenges when you’re trying to improve your credit score. You can leverage debt like a personal loan to purchase almost anything you need. When used strategically, they can also be used to boost your credit score. The key is not to apply for new debt unless you have an urgent need or the debt will help you gain better credit.

Pay Your Debts Early or by the Due Date

Paying on time is a simple but powerful way to improve your credit score. If you’re constantly paying late, it’s time to focus on getting things paid on time. You can do this by setting up autopay, setting a reminder on your phone, and by making wise financial decisions to ensure you have money in your accounts when bills are due. If you’re struggling to make enough to cover all the bills and debts, it might be time to take on a temporary side hustle to catch up.

Check Your Credit Reports

You need to pay attention to your credit reports, not just your credit score. Make sure that the things on them are supposed to be there. Contact the reporting agencies to remove any discrepancies. Look for accounts that say they are past due, and check your records. It’s up to you to ask for things to be made right. If old debts show up that you paid off, you can request their removal.

Pay Attention to your Debt-to-Income Ratio

Having a lot of debt but not a lot of income will impact your credit score greatly. Find ways to improve this score. Take on jobs to make more money, pay down your revolving credit, and pay off debts. Your debt-to-income ratio is a big part of your credit score, so it’s vital to focus on this. By checking your credit report you can be sure all the debts that are still owed show up, that the balances are correct and that there is nothing outstanding on there that you forgot.


Having a good credit score is a huge benefit. Making good financial decisions and being intentional about your credit are the best ways to give it a boost. Even if you made poor decisions in the past, you could repair your credit so that your score is in a higher range. By strategically paying off debts, removing bad debt from your credit score, and improving your debt-to-income ratio, you’ll get that score up in no time.