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Where to Begin When Cleaning Up Your Credit Score

Maybe you didn’t make some of the best financial decisions when you first got your credit card or auto loan, causing your credit score to take a pretty big hit. First things first, try not to beat yourself up over it because it happens to everyone. Most of us have forgotten about a payment or maxed out a credit card. It happens! 

What’s important is to know that you can fix your credit. Keep reading to learn some of the best ways to improve or build your credit score. 

How to Build Credit 

Let's establish upfront that if you’re starting from scratch, it takes awhile to build your credit. So have patience. Don’t fall for the businesses that claim to build your credit “overnight” — it’s simply not possible.

How long does it take to build credit anyway? At least 6 months if you don’t have any credit history. Building good credit or excellent credit happens over years because you have to establish your payment history and more. 

There’s a lot that goes into your credit score and it takes time for the credit bureaus to gather the information they need to give you a credit score. 

What Goes into a Credit Score? 

Your credit score is determined by math (AKA credit scoring models). The two main credit scoring models are FICO and VantageScore which both set the credit score range from 300 to 850. The FICO score is a little bit more popular with lenders than VantageScore. 

Of course the actual formula they use to figure out your credit score is top secret. But, FICO does provide some general guidelines in terms of what impacts your credit score and by how much: 

  • Your on-time payment record - 35%
  • Your credit utilization - 30%
  • Your length of credit history - 15%
  • Your credit mix - 10%
  • Your recent credit applications - 10%
woman with credit card

So, How Do You Improve Your Credit Score? 

Now that we know what impacts your credit score, we know where to start when building or improving your credit score. We’ve rounded up a to-do list for cleaning up that credit score!

#1. Dispute Errors on Your Credit Report 

If you check your credit report and see that it’s full of errors, you want to make sure you dispute them because they negatively impact your credit score. If it says you missed a payment that you know you made on time, challenge it!

If you see accounts open that you didn’t open, then you should dispute them and take steps to protect your identity. 

Making sure your credit report is correct is important because that’s what decides your credit score. You want those details to be correct. 

#2. Keep an Eye on Your Credit Utilization Ratio

Your credit utilization ratio is all about how much of your available credit is in use. You’re not supposed to use more than 30% of your available credit at any one time so keep an eye on that. No maxed-out credit cards here. 

#3. Use EXTRA 

Usually, when you want to build your credit but have a bad credit score, most turn to a “secured credit card.” Secured credit cards are attractive as they are easier to get approved for compared to a traditional credit card. The cons? They require a deposit and usually have high-interest rates. 

Trust us there is another way! One word: EXTRA. We’re the first debit card that helps you build credit. We sync right up with your debit card so that we know what money you’ve got in the bank. 

Then, every time you swipe that card, we spot you and pay ourselves back from your bank balance the next day. So, your credit utilization stays at zero, and it’s impossible to carry a balance with us. 

At the end of the month, we report all of the payments you made to the credit bureaus as creditworthy payments, and boom, you’re building and improving your credit. Just like that. 

#4. Get Your Rent or Utility Payments Reported to the Credit Bureaus

Maybe you haven’t done so well with paying back loans, but you always pay your rent and utility bills on time. Did you know that you can get those payments reported to the credit bureaus so that they can be used to raise your credit score? 

Well, you can. You’ll want to ask your landlord or property manager if they report rent payments to the credit bureaus. If they do, you’re in business! If they don’t, you’ll want to find a service like RentTrack to do it for you. 

They’ll report your payments to all three credit bureaus. You’ll probably have to pay for it and will have to verify your landlord’s information and your identity, but it’s worth it to improve your credit score. 

Once you’re signed up, make sure you follow the service’s directions for paying your rent so that your payments can be reported quickly and efficiently. See if they can report past payments as well. It doesn’t hurt to ask, and if they can, you’ll be extending your credit and payment history, which will be great for your credit score. 

#5. Get a Credit-Building Loan

These loans are literally designed to build your credit. You usually have to get them from a smaller local bank or credit union that’s invested in building up its community. 

The loan will probably be for a small amount ($1000 or less) and actually isn’t like your typical loan. 

Here’s how it works: 

  • Your bank or credit union will put the loan into a savings account that you can’t access. 
  • Over whatever period of time you both agree to, you’ll pay off the loan just like you would any other loan. 
  • Once the loan is paid off, the money is returned to you. 

It might seem random and like a waste, but these “loans” are actually a great way to build or improve your credit score. 

Your payments get reported to the credit bureaus and paying this “loan” back responsibly helps build your credit and payment history. So, see if your local bank or credit union offers a credit-building loan. It can’t hurt to ask! (Unless of course you don’t pay it back how you’re supposed to). 


#6. Get a Co-Signer or Become an Authorized User 

If someone in your life has good credit, consider asking them to co-sign your credit application or add you on their credit card account as an authorized user. Both of these methods are helpful when building or improving your credit score because your lower credit score will benefit from their higher, stronger credit score. 

A co-signer makes you less risky to lend money to because the lender knows that if you don’t make your payment, there is someone else on the line (your co-signer) that has agreed to pay them. 

Depending on how it's reported, your credit activity as an authorized user will get added to your credit report. And since the main account holder is a responsible credit user and pays their bills on time, your credit score will benefit. 

Getting a co-signer or becoming an authorized user can be great ways to repair your credit. 

Remember, the credit score you have today is not the credit score you will have for the rest of your life. You can take your personal finances and financial future into your own hands and build your credit so that you have a score that enables you to get low interest rates and use credit to responsibly achieve your personal or financial goals.

We’re rooting for you! 

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