Credit Score 101
Understanding and improving your credit
What is a credit score, and why is it important?
You may wonder, “Why should I try to keep a good credit score?” Here are some reasons why.
Good credit score benefits
Lower interest rates
Lenders see you as less risky, offering you loans and credit cards with lower interest rates. This means you’ll pay less interest over time, saving you money in the long run.1
Easier loan approval
With a good credit score, you’re more likely to get approved for loans, whether for buying a car, getting a mortgage for a house, or financing needs.
When renting, landlords often check credit scores to assess a tenant’s financial responsibility. A good credit score might make it easier for you to secure a rental property.1
While not every employer will check credit scores, some positions that involve financial responsibilities might consider your credit history as part of the hiring process.2
In some cases, a good credit score can lead to lower insurance premiums, as insurers may view responsible financial behavior as an indicator of responsible everyday behavior.2
The number matters
Less than 630 = Poor
630-689 = Fair
690-719 = Good
More than 720 = Excellent3
How to view your credit score
How to improve your credit score
Pay bills on time and in full
Paying on time will increase your credit score. You may want to consider setting up a budget, automatic payments, or reminder alert to help you keep up with bills. And making at least the minimum payment on credit accounts—like your credit card—will keep your tabs current and in good standing. Did you know not paying your bills on time will cause them to appear on your credit record for up to 7 years, which is why paying it off promptly is so important.
Become an authorized user
If you have a loved one or someone you trust with a good credit score, some credit card companies will allow you to be added as an authorized user to their account. This allows you to make purchases. But the primary account holder is ultimately responsible for payments. And their responsible use can help build your credit and help your score rise. Sometimes, there needs to be a credit check, or you may have to apply to be an authorized user.4
Set up payment reminders
Be sure to keep note of payment deadlines for each bill in a planner or calendar and set up reminders online. Consistently paying your bills on time can raise your score within a few months.
Pay more than once in a billing cycle
If you can afford to, pay your bills every two weeks rather than once a month. This lowers your credit utilization and improves your score.4
Don't close unused credit card accounts
The age of your credit history matters, and a more extended history is better. If that credit card account is too tempting, try freezing the account instead of closing it. If you absolutely have to close credit accounts, close newer ones.5
2 Gogol, Frank. “9 Incredible Benefits of Good Credit .” Stilt Blog, 9 Aug. 2023, .
3 Barroso, Ammanda, and Bev O’Shea. “Guide to Understanding Credit Scores and Score Ranges.” NerdWallet, Accessed 15 Aug. 2023.
4 Barroso, Ammanda, and Bev O’Shea. “9 Ways to Build and Improve Your Credit Fast.” NerdWallet, Accessed 15 Aug. 2023.
5 Copeland, Milvionne Chery. “Is It Better to Cancel Unused Credit Cards or Keep Them?” WalletHub, 8 Dec. 2022, Accessed 15 Aug. 2023.