How Does a Person Better Their Credit Score?

Your credit score is a very important way that lenders, employers and even landlords can determine whether you are financially responsible or not. It makes sense that you would want to do all you can to make it better. Getting a better credit score sometimes happens quickly, like when you pay off a high credit card balance, but more often, it happens slowly and takes a few months or years of consistent effort .

Pay Your Bills on Time

Your payment history plays a big part in determining your credit score. In fact, it is the most important factor in determining your score, making up 35 percent of your total score, according to the University of Illinois. Pay all your bills promptly, and over time you should see an increase in your credit score. Setting up automatic payments either through the credit card company's website, or through your bank, will also help you avoid late payments.

Reduce Your Overall Balance

Another good way to increase your credit score is by paying down your credit card balance. Your credit score decreases when you have a total balance that is close to your overall credit limit, and reduces when you have a lower balance when compared to your credit limit. Keeping the balance on all your cards within 30 percent of your total credit limit will help improve your score. Also, maxing out a card or charging a lot on one card even when you have other cards empty will have a negative impact on your score. To improve your score, distribute the debt among all your cards, or, even better, pay down the debt completely.

Keep Credit Inquiries to a Minimum

Many people don't realize the effect of credit inquiries, or even how often companies or lenders perform them. To better your credit score, don't apply for credit unless you intend to use it. Be vigilant about when and how often your credit is being pulled so that you can curb unnecessary inquiries.

Use Your Credit Cards Often

Inactivity can hurt your credit score, or keep it from improving, even if you have paid your balance in full and are otherwise a responsible borrower. When your card is inactive, you do not have the chance of showing financial responsibility. Also, you risk getting the card closed by the credit card company and having your overall available credit reduced, which makes a dent in your credit score. To better your score consider putting a monthly bill on your credit card and paying it off in full at the end of the month.