Boost Your Credit Score: Proven Strategies to Improve Your Financial Health

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If you want to see your credit score rise, here are some key moves to make.

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Key points

• Many Americans are not happy with their credit scores, but there are some key steps to increase your score.
• Paying your bills on time and not using more than 30% of your available credit are just a couple ways to boost your credit score.

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Are you pleased with your credit score? If you're not, you're in good company. A recent survey by Discover found that 45% of respondents aren't currently satisfied with their credit score.

Given the financial impact the pandemic may have had on some people, that's understandable. Many consumers had to rack up credit card balances last year to make ends meet. But if you're looking to boost your credit score, here are a few key steps to take.

1. Pay all of your bills on time

There are different factors used to calculate your credit score. The one that carries the most weight is your payment history.

Your payment history speaks to how responsible you are as a borrower. If you're on time with payments, your credit score will reflect that. If you're often late, your score could plunge.

Often, consumers rack up late payments not because they're forgetful, but because they don't have the money to cover their expenses. If you're worried about being late with future payments due to a lack of funds, consider getting a side job temporarily to boost your income and help yourself stay current.

2. Chip away at your credit card debt

The amount of credit you're using at once can also impact your credit score, and too high a utilization ratio can cause your score to plunge. Ideally, you should aim for a credit utilization ratio of 30% or less. That means if your total spending limit among all of your credit cards is $10,000, you should, ideally, not owe more than $3,000.

If your utilization ratio is above 30%, paying off some credit card debt could help your score improve quickly. But coming up with the money to do that may be a challenge. You may need to prioritize paying off credit card debt in your monthly budget, or find ways to increase your income.

Of course, you could also try asking your existing credit card companies to raise your credit limit. But if your credit score isn't in the best shape, they may say no.

3. Check your credit report for errors

Many people don't realize how common credit report errors are, but a whopping 34% of U.S. consumers have found a mistake on their credit report. If your credit report contains information that's harmful to your credit score, fixing those errors could help improve your number.

Say you're listed as having been late on a payment you made on time. You may be able to work with the reporting bureau in question to correct that mistake -- say, by getting a letter from the creditor that you were supposedly late in paying confirming that your account has always been current.

The higher your credit score is, the easier it'll be to get approved for a loan or new credit card. And if you're looking to rent a home, you'll need decent credit to qualify. If you're worried about your credit score or think it could be higher, take these steps to raise it. Doing so may take a little time, but if you put in the effort, you may be rewarded in the form of more borrowing opportunities when you need them.

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