Library of Congress Federal Credit Union

A solid credit score can help you finance your first home, a new car, and even save you money with lower interest rates for those loans. Here are five factors that can repair or even boost a credit score.

On-time Payments
The biggest factor in maintaining a good credit score or repairing one that is a bit tarnished is on-time payments. Those on-time payments account for just over one-third of your overall score. Miss just one payment, and it can affect your credit.

What to do: Set up automatic payments where possible and/or add reminders on your calendar. If you fear you might be late with a payment, call the lender directly to avoid a ding on your credit.

Mix and Match Your Credit
Want to positively impact your credit score without doing much? Maintain a mix of a few credit cards, one car loan, one mortgage loan, and some credit card accounts. Too much of just one type of loan can send up red flags, which can negatively impact your score.

What to do: Try to keep your oldest credit card open – it helps build your history. Carefully consider all new loans. If you already have a few credit cards, maybe find a way to utilize the ones you already have or transfer your balance to a new card and close the old one.

Don’t Overdo It
To maintain a healthy credit score, try to keep your credit card utilization ratio below 30%. To calculate your ratio, divide your total credit limit on all of your credit cards by your total current balance. This will give you a percentage.

What to do: Paying down your credit card balances could improve your credit utilization ratio. It could also improve your overall loan-to-income ratio used by home loan lenders.

Don’t Apply for too Many Loans
Every time you apply for a new loan or credit card, that lender will check your credit. That credit check can have a negative impact on your total credit score.

What to do: Before signing an application to allow a credit check, ask if they will be doing a “hard” or “soft” check on your credit. Try to avoid hard credit checks.

Review Your Report Regularly
Get a free copy of your report from each of the reporting agencies once every 12 months. Then carefully review those reports. To get yours, visit annualcreditreport.com or call (877) 322-8228. Aim to review a different agency report every four months.

What to do: Look through each report for errors and fraud, including duplicate accounts, inaccuracies, or any closed or inactive accounts. Then, dispute those inaccuracies directly with the reporting agency. The names of those agencies and their dispute pages are below.

• Equifax’s dispute page
• Experian’s dispute page
• TransUnion’s dispute page

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