Credit on the Mend: How to Keep Improving

Maintaining good credit comes with advantages. According to Equifax®, the good credit score range is 670-739. When lenders see that you use and pay back credit responsibly, they may offer lower interest rates, better terms and a quicker approval process. 

Many of the suggestions for improving your credit score are the same as those for people who need to completely rebuild their credit. These tips include:

• Pay loans and bills on time with no missed payments. 
• Stay within credit limits—aim to keep credit in use under 30% of your available credit.
• Borrow or charge only what you can afford to pay back. 
• Check your credit report regularly through credit bureaus, like TransUnion® and Experian®, or get your VantageScore® number by using the Mission: Credit Confidence® Dashboard. 

If you want to move your credit from good to very good (740-799), here are a few more strategies to consider: 

• Keep old credit card accounts open so your available credit doesn’t drop. Having more credit allows you to borrow more; a good credit utilization ratio is important as well. To get the best credit scores, users should try to keep their credit utilization in the single digits. 
• Work with credit card balances to find what’s right for you. Transferring debt to one card with a lower interest rate can help you pay down your debt. 
• Diversify your credit mix through different types of loans, such as credit cards, auto loans or a mortgage.

Using Credit to Improve Your Finances

A good credit score makes it easier to shop around for a good price, buy or rent a home, or finance a major purchase. With an improved credit score, you may:

• ask for an increased credit limit and better interest rates. With a better credit history, lenders are often more willing to give a higher credit limit and lower interest rate because you’re likely to pay the money back. Lower interest rates allow you to borrow money for a lower cost while higher limits allow you to borrow more. 
• refinance your mortgage. Finding that sweet spot for getting or refinancing your mortgage is key. Although 720 was once considered ideal, a score of 740 is often the minimum to get the best deal and not incur extra fees. Refinancing your mortgage with a better credit score can mean a better interest rate and lower payments.
• get a great car loan rate. A higher credit score often means lenders are more willing to give a lower financing rate, saving you money. Have an existing car loan? Check whether refinancing makes sense for you.
• apply for a new job. Some employers perform credit inquiries when you’re being considered for a job, which could delay you professionally. With an improved credit score, you could get a higher-paying gig.

Bad credit doesn’t have to hold you back. Making on-time payments, improving your credit utilization ratio by balancing opening new accounts with minimizing additional debt and regularly monitoring your credit will help you get a good score.