I’ve got money on my mind, specifically credit and credit scores. Everyone wants to know how to fix credit. As someone who got hip to the credit game a bit late, I’ve learned a lot in the last few years. Good credit, bad credit, no credit, wherever you fall on the spectrum, you need credit. Today I’m telling you everything I’ve learned about fixing credit. When you want to buy a car, or rent an apartment, or apply for a new credit card, guess what get’s checked?

Yep, your credit score. Growing up I wasn’t taught much about credit how to manage it. All I ever heard was credit cards were bad, bankruptcy is a last resort, and never co-sign for anyone. It’s no wonder I ended up in debt. My credit is better now than it has been in years, so I want to tell you everything that I’ve learned about fixing credit.

Back to Credit Basics

First things first, it’s important to understand what a credit score is and what it’s used for. Your credit score is a measure of your credit worthiness. Basically it’s a report card that let’s lenders know if you will be a good or bad borrower. The higher the score, the better your chances are of getting approved for things with low interest. The lower the score the harder it is to get approved. So what determines your score?

Everything That Makes Up Your Credit Score

Pay Your Bills On Time

Your credit score is determined by 5 different things. Payment history, credit utilization, credit age, credit mix, and Inquiries. 65% of your score is determined by 2 things, payment history and credit utilization. The quickest way to improve your credit is to pay your bills and pay them on time. Matter of fact, pay them 10-14 days early if you can. Late payments will drop your score like nobody’s business. Payment history is averaged, so It will take a lot of on-time payments to average out a bunch of late ones.

Lower Your Credit Card Balance

You know how when you get a credit card everyone tell you not to run the balance up? Turns out there’s some truth to that. Another easy way to raise your credit score is to lower your credit utilization. Credit utilization is how much credit is being used of the overall credit available. Basically if you have a credit card or multiple cards, you should only carry a low balance if any balance at all. 10% is deal, so if you a credit card with a $5000 limit, the max balance you should carry per month is $500.

On the flip side, if you consistently max out your card or carry a high balance it’s considered high utilization and will lower your score. Lenders want to know that your responsible, so if your credit card bill is sky high and you only make the minimum payment, your score will never go up. I know that life happens so if paying more a month isn’t feasible, request a credit line increase. Most people don’t actively request an increase and wait for the card company to do it. You should be requesting a credit limit increase every 90 days. The higher your limit, the lower the utilization reported.

Alternatively depending on how high the interest is on your cards it may be hard to make a dent in the balance. There are a couple of options here. The first is to do a balance transfer to a different card, ideally one with 0% APR. This way the payments you make go directly to the principal. This will save you tons of money over time. You can also reach out to the credit card company and see what options they have available. Some will lower the interest, other’s may offer payment plans or even forbearance. The important thing is that you do something.

How I’ve Used These Tips

I’ve managed to raise my credit score over 60 points in the last year. Was it hard? Yes. Is it doable? Yes. Do I regret playing YOLO with my finances when I was younger? Absolutely. But life happens and when you know better you do better. I focused on these tips because they make up the bulk of your score. You can’t manipulate credit age, and depending on circumstance credit mix may not be something to tinker with. Control the controllable, and paying your bills on time and lowering your credit card usage is definitely something you can control. Before you know it, your credit score will be climbing and you’ll get approved for anything you want.

That’s everything that I’ve learned about how to fix credit. Going to make money talk a regular thing. Let me know if you’ve put any of these tips to use!