Southland News

Credit scores 101: How to improve yours

July 1, 2025

Your credit score is more than just a number. It's a major part of your financial identity and can influence everything from loan approvals and interest rates to renting an apartment or even landing a job. The good news? You have the power to improve it.

In this blog, we’ll break down what goes into your credit score and share practical, easy-to-follow steps to help raise it over time.

What is a credit score?

A credit score is a three-digit number that lenders use to assess how likely you are to repay debt. The most commonly used model is the FICO® Score, which ranges from 300 to 850. A higher score usually means better financial opportunities.

Here’s a quick breakdown:

  • 800–850: Exceptional

  • 740–799: Very good

  • 670–739: Good

  • 580–669: Fair

  • 300–579: Poor

What affects your score?

Understanding what shapes your score is the first step toward improving it. The main factors include:

  1. Payment history (35%) – Late or missed payments can bring your score down fast.

  2. Credit utilization (30%) – This is the amount of credit you're using compared to what’s available.

  3. Length of credit history (15%) – A longer credit history can work in your favor.

  4. Credit mix (10%) – A healthy mix of credit cards, loans and other accounts shows you're responsible with different types of credit.

  5. New credit (10%) – Opening several new accounts in a short time can hurt your score.

How to improve your credit score

Here are some simple ways to start building better credit today:

1. Pay on time, every time

Even one missed payment can have a big impact. Set up alerts or autopay to help stay on track.

2. Lower your credit card balances

Try to keep your credit usage under 30 percent of your limit. If possible, aim for under 10 percent.

3. Keep older accounts open

Old accounts help lengthen your credit history. Even if you rarely use a card, it may help to keep it active.

4. Be cautious with new credit

Only apply for credit when you need it. Each new application can cause a small drop in your score.

5. Review your credit report

Mistakes happen. You can check your credit reports for free at AnnualCreditReport.com. Spot something off? Dispute it with the credit bureau.

Small steps, big payoff

Your credit score doesn't have to be a mystery. By taking small, steady steps like paying on time, watching your balances and checking your credit report regularly, you can build a stronger financial foundation. Over time, even simple actions can lead to big improvements.