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In this guide, I’m going to break down exactly what a credit score is, how it’s calculated, and the simple habits I used to improve mine — without needing to hire anyone or open a dozen new accounts.
Let’s talk about credit like real people, not robots.
If you’re anything like I was, your credit score probably feels like some weird number floating in space — mysterious, frustrating, and maybe even a little intimidating. I get it. I used to avoid looking at mine altogether. But once I learned how it actually works, improving it got a whole lot easier.
What Is a Credit Score, Really?
At its core, a credit score is just a number that tells lenders how risky it might be to let you borrow money. That’s it.
Think of it like your financial reputation.
Lenders use your score to decide:
If you can get approved for credit cards or loans
What interest rate you’ll pay
How much you can borrow
And yes, sometimes even landlords, utility companies, or employers check it.
The higher your score, the more “trustworthy” you look — and the more money you can save in interest and fees.
What’s a Good Credit Score?
Most credit scores are based on the FICO® score, which ranges from 300 to 850. Here’s the general breakdown:
800–850: Excellent
740–799: Very good
670–739: Good
580–669: Fair
300–579: Poor
First time I looked at my score, I was in my early 20’s, and my score was in the mid-600s. I didn’t even realize that was bad until a bank declined me for a basic card. But now that I know how it works, I’ve been able to raise it — and you can too.
How Your Credit Score Is Calculated
Knowing what makes up your score is the key to improving it. Here’s the breakdown:
Payment History – 35%
Did you pay on time? Late payments hurt.Amounts Owed – 30%
How much of your available credit are you using? This is called your credit utilization ratio, and lower is better.Length of Credit History – 15%
How long have your accounts been open? Longer history helps.Credit Mix – 10%
Do you have a variety of credit types (like credit cards, loans, etc.)?New Credit – 10%
Have you applied for a bunch of new credit recently? Too many hard inquiries can drop your score.
Understanding this changed the game for me. I realized I didn’t need to “do everything” — I just needed to focus on a few key habits.
Check Your Credit Score and Report
Before you can improve anything, you need to know where you stand.
I use Credit Karma and AnnualCreditReport.com to get my credit info for free.
Here’s what I did:
Pulled my score from at least two bureaus (Equifax and TransUnion)
Downloaded my credit report to check for errors
Highlighted anything that looked wrong — old accounts, late payments, etc.
You have the right to dispute inaccurate info. And cleaning up errors can give your score a quick boost.
Start Paying Everything On Time
This is the biggest factor in your score. If you do nothing else, do this.
Even one late payment can hurt you, and it stays on your report for 7 years.
Here’s how I made it easier:
Set up autopay on all my cards for the minimum payment
Created calendar reminders a few days before bills were due
Used one checking account just for bills, so I never ran out
Pro tip: If you miss a payment by a few days, call your lender and ask them not to report it. Many will give you a pass if it’s your first time.
Keep Credit Card Balances Low
Your credit utilization is how much of your available credit you’re using.
Example: If your card has a $1,000 limit and you owe $900, you’re at 90% — and that kills your score.
I aimed to keep mine under 30%, and eventually under 10%. That made a noticeable difference.
A few things that helped:
Paid my credit cards twice a month instead of once
Asked for a credit limit increase (but didn’t spend more)
Stopped using one card entirely and let the balance sit at $0
You don’t need to carry a balance to “build credit” — that’s a myth. Pay it off in full if you can.
Don’t Close Old Accounts
One mistake I made early on was closing old cards I wasn’t using anymore. I thought I was being responsible.
Turns out, that can hurt your length of credit history and increase your utilization.
Now I keep my oldest card open, even if I don’t use it often. I just set a small recurring charge (like Netflix) and pay it off every month.
This keeps the account active and helps my score over time.
Only Apply for New Credit When You Need It
Every time you apply for a new credit card or loan, it creates a hard inquiry on your credit report.
Too many of those in a short time can make it look like you’re desperate — and can drop your score by a few points each time.
I used to apply for cards just for the sign-up bonus. Not anymore.
Now I ask myself:
Do I really need this credit right now?
Will this improve my overall financial picture?
If the answer is no, I skip it.
Use a Secured Credit Card (If You’re Just Starting Out)
If your credit score is low or you have no credit at all, it’s hard to get approved for a regular card.
That’s where secured cards come in.
Here’s how they work:
You deposit money upfront (usually $200–$500)
That deposit becomes your credit limit
You use it just like a regular credit card
Pay on time, keep your balance low, and your score starts to rise
I started with one from Discover, and it helped me build credit fast.
Monitor Your Credit Regularly
Checking your credit doesn’t hurt your score — only hard pulls from lenders do.
Now I check mine monthly using free tools like:
Credit Karma (for score changes and alerts)
Experian Boost (for adding bills like utilities or rent)
My bank’s credit monitoring (a lot of banks offer this now)
Staying on top of it keeps me from being surprised. And it feels good to watch the number go up over time.
Be Patient — It’s a Long Game
I wish I could tell you that your score will jump 100 points in a month. But that’s not how it works.
Improving your credit is a long game — but the good news is, it will move in the right direction if you keep doing the right things.
After a few months of paying on time and lowering my balances, I started seeing slow, steady progress. It took about a year to go from “fair” to “good,” and I’m still aiming for “very good.”
Credit Doesn’t Have to Be Complicated
I used to feel embarrassed about my credit score. I didn’t understand it, and I definitely didn’t know how to fix it.
But now that I’ve learned how it works, I feel empowered — and you can too.
Here’s what I want you to remember:
Your credit score is not your worth
You’re not behind — you’re just getting started
Small habits (like paying on time and watching balances) make a big impact over time
Want to Take the Next Step?
- Check your credit score today
- Make a plan to lower your balances
- Set up automatic payments
- Sign up for the FIREInstitute newsletter for more real-talk tips
You’ve got this. Start building your credit the right way — one simple step at a time.
