Financial Planning

Keys to improving your credit score

CreditI don't mean to brag, but my wife and I have a credit score that's better than almost 97 percent of the population.

OK, I do mean to brag. I've never been better than 97 percent of the population at anything, so I'm going to enjoy this for a while. We've always had a pretty good credit score, but it's higher than ever right now, and I'm kind of proud of that. We've worked hard to stay within our means and pay off our debts, and that score is our reward. So there.

My point, though, is not our score. I've learned a few interesting things about credit scores and reports recently, and I thought I'd share them with you.

Let's start with who's authorized to provide your reports.

Since 2004, consumers have been eligible to request a free credit report once a year from each of the three consumer reporting companies (Equifax, Experian and TransUnion). According to the Federal Trade Commission, the only online source that's authorized to provide those reports is So forget those TV ads and catchy jingles and turn to instead.

A recent edition of the National Public Radio program "Morning Edition" was a wealth of information about credit reports as well. For instance:

  • Three factors impact your credit score more than any other -- whether you pay your bills on time, the amount of money you owe and the length of your credit history (in other worlds, how long you've had a relationship with your lenders).
  • Some key ways to improve your credit score? For starters, don't miss a payment -- even if it means making only the minimum payment -- and avoid using more than 35 percent of your available credit at any given time.

It's important to note that as the credit crunch drags on, the score at which lenders begin to sweat is rising. NPR's program claims that score is somewhere around 680. So improving your score is more important than ever. -- the online presence of the Fair Isaac Corporation, which determines your credit score -- has lots of other tips for improving your score. Read up, then tell us what you're doing to improve your credit score.

Check out these other financial literacy resources:


Bill Sheridan