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credit score tips and tricks

With the number of credit score estimation services available online, determining your creditworthiness with a three-digit score isn’t a huge lift. The most commonly used scoring models range from 300 to 850, with the average score in America sitting at 711. 

Based on a multitude of factors, your credit score is bound to fluctuate over time. But if you’re wondering, “How can I increase my credit score naturally”, being told to pay your bills isn’t a very helpful answer. However, with the help of a proactive analysis of your finances, there are a few credit score tips and tricks you can use to get on the right track.

Determine Your FICO Score

When referring to creditworthiness, the term “FICO score” often gets thrown in the mix. FICO scores can be considered the gold standard for creditworthiness, and are used by 90% of top lenders to make decisions about credit approvals, loan terms, and interest rates. 

Your score is calculated based on five categories: payment history, amounts owed, length of credit history, credit mix, and new credit. Each category has its own weight, with payment history being the heaviest percentage (35%). 

After calculating your FICO score, it will be easier to map out which area of improvement you should tackle first. 

Avoid Late Payments

Since payment history is such a defining factor of your credit score, it makes sense that paying bills in a timely manner is one of the most important suggestions to improve credit. Making a loan payment on time not only helps your credit score but also allows you to avoid late fees. 

With 1st Ed, you can easily make a payment 24/7 with online or mobile access and even sign up for email or text alerts when your loan due dates are approaching. 

Mind Your Credit Limits 

In addition to payment history, credit utilization is another big aspect of your credit score calculation. It’s basically a ratio of how much available credit you have from a lender to how much you have used. 

Using a high percentage of available credit from a lender will lower your credit score, so it’s always best to use a small portion of your credit. As most financial advisors suggest you stay below 30% of your credit limit, it’s crucial that you monitor your balances the same way you check in on payment due dates.

It helps to have a financial institution that you trust for full visibility when you need to improve your credit score. Learn more about VISA® Credit Cards from 1st Ed Credit Union and take control of your credit today. 

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