- Making debt payments on time is one of the most important parts of building a good credit score. Your debt payment history accounts for 35 percent of your total credit score, according to MyFico. Late or missed payments can damage your credit score; even payments that are late by a few days can be detrimental. Make use of automatic bill pay or bill reminders if your bank offers such services.
- Consumers can order free credit reports from Experian, TransUnion and Equifax every 12 months. Ordering a free credit report can help you keep track of your score and detect errors in your report. If you order a credit report that contains an error, contact the reporting agency and the company to dispute the information. Cleaning up errors can boost your credit score.
- The total amount of debt you carry weighs in heavily on your credit score. The amount of money you owe and your total available credit make up 30 percent of your credit score, according to MyFico. Paying down more debt each month by cutting back on unnecessary expenses can reduce your total debt and boost your credit score. The ratio of your total credit limit to credit balance is also important. The more credit you have and the lower your balance, the better. Closing an old credit account may harm your credit score even if you don't carry a balance because it will reduce your total amount of available credit.
- Taking out new loans and opening new credit lines tend to hurt credit scores in the short term. Don't take on too many new debts or credit accounts within a short period of time. Opening new credit accounts and paying them off each month can help establish credit history and improve your score over time.