How to Improve Your Credit Score: Proven Strategies for a Stronger Credit Profile

By Erick Kasner, PhD

During my five years as a SCORE mentor, the biggest obstacle facing most of my clients was the issue of having a poor credit score. I still see that while consulting prospects outside of SCORE. Thus, affecting financial opportunities to launch or start a business (there is a significant difference between the two as noted in the first chapter of my latest book, Launching Your Dream Business), and equally seeking to expand an existing business.

A higher credit score, that above 680, can and will open opportunities for you for funding while potentially saving you thousands in interest, unlock better terms, and reduce the need for self-equity infusion, which can be costly in more ways than one.

If your score isn’t where you’d like it to be, here are nine (9) effective and proven strategies to help you raise your credit score while maintaining a healthy credit profile.

1. Check Your Credit Report for Errors

Start by requesting your free credit reports from AnnualCreditReport.com. Look for:

• Incorrect personal information

• Accounts that don’t belong to you

• Outdated or inaccurate balances

If you find any mistakes, file an immediate dispute with the credit bureau. Correcting an error could give your score an immediate and potentially a sizable boost.

2. Strive To Pay Your Bills on Time

Payment history accounts for at least 35% of your credit score. Even one missed payment can negatively affect your score. Therefore, use:

• Automatic payments

• Calendar reminders

• Budgeting apps. Budgeting applications can be powerful tools to help you take control of your finances and work towards improving your credit score. Many of these apps connect to your bank accounts and credit cards, automatically importing and categorizing your transactions, eliminating the need for manual tracking.

Consistently paying bills on time is one of the fastest ways to elevate your credit score.

3. Lower Your Credit Card Balances

Your credit utilization rate, which is the amount of credit you’re using versus your limit, should be below 30%, though ideally under 10%.

For example:

• If your card limit is $1,000, aim to keep the balance under $300

• Paying off your cards in full each month is the best practice. If that becomes an issue, reduce your spending. Keep in mind that elevating your credit score is your primary goal.

Lower utilization signals responsibility on your part while boosting your credit score.

4. Refrain From Opening Too Many New Accounts

Applying for new credit creates a hard inquiry, which can temporarily lower your score. Too many inquiries in a short time looks risky to lenders.

Open new accounts only when necessary, and space out applications.

5. Keep Old Accounts Open

The length of your credit history matters and is critical. Closing old accounts, especially those in good standing, can and will shorten your history and lower your credit score.

Unless there’s an unreasonable annual fee, keep those older accounts open and active.

6. Build a Diverse Credit Mix

Lenders like to see that you can manage different types of credit, such as:

• Credit cards (revolving credit)

• Student loans, car loans, or mortgages (installment credit)

But don’t take on debt just to "diversify." Only borrow what you need and can afford.

7. Use a Secured Credit Card or Credit Builder Loan

If you have no credit or poor credit, these tools can help:

• Secured credit cards require a refundable deposit and report to all major credit bureaus

• Credit builder loans hold your funds in a savings account until repaid, helping you build a positive payment history

8. Become an Authorized User

Ask a family member or close friend with good credit to add you as an authorized user on their credit card. You’ll benefit from:

• Their on-time payments

• Their low balance-to-limit ratio

This can be a great shortcut for boosting your score. Make sure, however, that they manage their account responsibly.

9. Try Experian Boost

Experian Boost is a free tool that lets you add utility, phone, and streaming service payments to your credit file. It only affects your Experian report, but many users see an instant score increase. The length of your credit history also plays a role in your credit scores. Adding more accounts to your Experian credit file with Experian Boost helps you build credit history by showing more evidence of active accounts and on-time payments.

In Summary

Improving your credit score won’t happen overnight. Though every smart step you take makes a difference. Be patient, stay consistent, and track your progress.

Recognize that your credit score is more than just a number. Rather, a reflection of your financial habits, responsibility, and your future potential.