How do I get and keep a good credit score?

There is no secret formula to building a strong credit score, but there are some guidelines that can help.

Pay your loans on time, every time

Some helpful ways to make sure your payments are on time are to set up automatic payments or electronic reminders. If you’ve missed payments, get current and stay current. Most credit scores consider repayment history as the number one factor for building a strong credit score.

Don’t get close to your credit limit

Credit scoring models look at how close you are to being “maxed out,” so try to keep your balances low compared to your total credit limit. If you close some credit card accounts and put most or all of your credit card balances onto one card, it may hurt your credit score if this means that you are using a high percentage of your total credit limit. Experts advise keeping your use of credit at no more than 30 percent of your total credit limit. You don’t need to carry a balance on credit cards to get a good score. In fact, you don’t need outstanding debt at all. Paying off the balance in full each month helps get you the best scores and keeps your interest costs as low as possible.

A long credit history will help your score

Credit scores are based largely on how you manage credit accounts over time. The more experience your credit report shows with paying your loans on time as agreed with your lenders, the more information there is to determine that you are a good credit recipient.

Only apply for credit that you need

Credit scoring formulas look at your recent credit activity as a signal of your need for credit. If you apply for a lot of credit over a short period of time, it may appear to lenders that you are dealing with financial setbacks.

Fact-check your credit reports

If you spot suspected errors, dispute them. If you have old credit card accounts you are not using, keep an eye on them to make sure that an identity thief is not using them.

Tip: If you are new to credit, or need to improve your credit, consider getting a product designed to help you establish and build credit. Financial institutions have developed an array of products and services, such as secured credit cards and credit builder loans, tailored to helping consumers establish and build credit.

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