Many people face difficulties in keeping their credit scores up due to various reasons such as late payments, high balances or delinquent accounts. Maintaining a good credit score is necessary for financial stability, as it affects one’s ability to obtain loans, mortgages, or even rent an apartment.

A high credit score opens the door to better interest rates and more favorable terms on credit cards and other types of financing.  But building a credit score is not out of reach. There are steps for borrowers to repair their credit history and boost their scores. The following blog post outlines practical tips that borrowers must follow to improve their credit scores over time.


  • Maintaining a good credit score is necessary for financial stability, as it affects one’s ability to obtain loans, mortgages, or even rent an apartment.
  • Checking the accuracy of credit reports is necessary for identifying any errors or inaccuracies that negatively impact a borrower’s credit score.
  • Borrowers must review their personal information, account information, inquiries, public records, and credit scores to identify any incorrect information in their credit reports.
  • Disputing any mistakes found in a credit report with the credit bureau(s) is necessary for correcting any errors and potentially improving a borrower’s credit score.
  • Making timely payments is a key factor in building a good credit score for borrowers, and negotiating payment terms or setting up automatic payments helps assure payments are made on time.
  • Reducing credit utilization is necessary for improving a borrower’s credit score, and maintaining a low credit utilization rate (below 30%) demonstrates responsible financial management to lenders.
  • Seeking professional help, such as credit counseling or debt management services, is necessary for borrowers who are struggling to manage their debts effectively.

Checking Accuracy Of Information

Borrowers must regularly review their credit reports to confirm that all the information is accurate and up-to-date. Credit reports contain information about borrowers’ credit history, including their payment history, credit utilization, and the types of credit accounts they have.

It’s necessary for borrowers to review their credit reports carefully to identify any errors or inaccuracies. Lenders use the information in credit reports to evaluate borrowers’ creditworthiness, which affects their ability to obtain credit, loans, and even employment.

Borrowers need to check for errors such as incorrect personal information, accounts that don’t belong to them, and payments that were reported as late even though they paid on time. Borrowers have to contact the credit bureau(s) to dispute the information if borrowers find any errors. The credit bureau(s) investigate the dispute and correct any errors they find.

How to Identify Incorrect Information

Identifying incorrect information in a credit report is a key step toward improving a borrower’s credit score. Here are the steps on how to identify incorrect information in a credit report.

  1. Check Personal Information. Borrowers have to check if their personal information, such as their name, address, and social security number, is accurate. Incorrect personal information leads to confusion and errors in a credit report.
  2. Review Account Information. Borrowers need to carefully review their account information, including the type of account, credit limit, balance, and payment history. They must check if there are any accounts that do not belong to them or any payments that were reported as late, even though they paid on time.
  3. Look for Inquiries. Borrowers have to check for inquiries on their credit reports. Inquiries are requests for credit report information made by lenders and other entities. Too many inquiries lower a borrower’s credit score.
  4. Check Public Records. Public records, such as bankruptcies, tax liens, and judgments, appear on a credit report. Borrowers must confirm that any public records listed in their credit report are accurate.
  5. Verify Credit Scores. Borrowers need to check their credit scores to see if they are accurate. Credit scores are calculated based on the information in a credit report, so inaccuracies in the credit report lead to incorrect credit scores.

Following the steps above allows borrowers to identify any errors or inaccuracies in their credit reports and take steps to correct them. They are able to help them improve their credit score over time, leading to better interest rates, loan terms, and job opportunities.

Disputing Mistakes

Borrowers who find an error or mistake in their credit report must dispute it with the credit bureau(s). They have to contact the bureau(s) and explain the mistake, providing any documentation or evidence to support their dispute.

The bureau(s) investigate the dispute by contacting the lender or creditor that reported the information. They provide the borrowers with the results of the dispute after the investigation. Corrected credit reports, potentially leading to an improved credit score if the dispute is successful.

Making Timely Payments

One key factor in building a good credit score for borrowers is making timely payments. Late and missed payments significantly impact their credit score and make it difficult to obtain loans, credit cards, or other financial products.

It’s necessary for borrowers to track expenses and budget effectively so that they have enough money to make all required payments on time each month. Negotiating payment terms with lenders or creditors is helpful if they’re struggling to keep up with payments. Certain lenders are able to work out an alternative payment plan that better fits their current financial situation.

Setting up automatic payments for bills such as rent, utilities, and loan repayments is another option for borrowers. Doing so helps guarantee that they are paid on time without checking each due date individually. Prioritizing debt repayment by paying off high-interest debts first help reduce overall interest charges and improve borrowers’ credit utilization ratio is another key factor in determining their credit score.

Reducing Credit Utilization

Reducing credit utilization is a necessary step towards improving one’s credit score as it demonstrates to lenders that borrowers are responsible for managing their credit and finances. Credit utilization is the percentage of credit that borrowers have used compared to the total credit limit available to them.

For example, credit utilization is 50% if borrowers have a credit card with a $10,000 limit and a current balance of $5,000. High credit utilization negatively impacts credit scores because it suggests borrowers have trouble repaying debts or managing their finances. A high credit utilization rate indicates that borrowers are dependent on credit to cover their daily expenses and are at risk of defaulting on their payments.

Maintaining a low credit utilization rate (below 30%) shows lenders that borrowers only use a small portion of their available credit and are not overextended financially, according to Investopedia. It demonstrates that borrowers are more likely to be able to pay their bills on time and manage their debts effectively, leading to a more positive credit score.

Borrowers must make payments on time, pay more than the minimum required amount, and avoid using credit cards for everyday expenses to reduce credit utilization. Keeping balances low and using credit sparingly allows borrowers to improve their credit utilization and increase their chances of being approved for credit at more favorable terms.

Seeking Professional Help If Necessary

Borrowers who are struggling to improve their credit scores despite their best efforts benefit from seeking professional help. There are several options available to borrowers, including credit counseling and debt consolidation programs.

  • Credit counseling agencies offer personalized financial plans to help borrowers manage their debts effectively. A credit counselor works with borrowers to create a budget, negotiate with creditors for lower interest rates or better repayment terms, and provide guidance on how to improve credit scores. They offer education on financial literacy and money management skills.
  • Debt consolidation programs are another option for borrowers who are struggling with multiple debts. These programs consolidate several debts into a single payment plan, making it easier to manage and reducing overall interest rates. But it’s necessary to research and choose a reputable debt consolidation program that’s suitable for individual financial needs.

It’s necessary to note that seeking professional help must not be deemed a quick fix for credit issues. It takes time and effort to improve credit scores, and the assistance of professionals has to be viewed as a tool to help borrowers reach their financial goals. Borrowers must follow the advice given by professionals and commit to making necessary changes to their financial habits to see lasting improvements in their credit scores.

Benefits of Having A Good Credit Score

A credit score is a numerical representation of a borrower’s creditworthiness. It’s a three-digit number ranging from 300 to 850. It is based on a borrower’s credit history, which includes factors such as payment history, length of credit history, types of credit used, and credit utilization.

A good credit score is a key part of financial stability and leads to better opportunities for borrowers. Listed below are the benefits of having a good credit score.

  • Lower interest rates – Borrowers with good credit scores are likely to receive lower interest rates on loans, credit cards, and other financial products. It means that borrowers pay less interest charges over the life of the loan, saving them money in the long run. For example, the interest rate for a personal loan with a good credit score is lower than the national average. The average personal loan interest rate is 10.95%, according to Bankrate.
  • Higher credit limits – A good credit score increases the likelihood of being approved for higher credit limits on credit cards. It is particularly useful for making big-ticket purchases or in emergency situations.
  • Better job opportunities – Certain employers conduct credit checks as part of their hiring process, especially for positions that require handling finances or sensitive information. A good credit score increases a borrower’s chances of being hired for the said positions.
  • Easier approval for housing – Landlords and property managers conduct a credit check as part of the rental application process. A good credit score makes it easier for people to be approved for housing, as it shows that they are responsible with credit and are likely to pay their rent on time.

Borrower Credit Score Loan Type Interest Rate Loan Amount Savings
A 800 Personal Loan 7.00% $20,000 $3,700
B 650 Personal Loan 12.00% $20,000 $7,400
C 750 Credit Card 15.00% $10,000 $6,300
D 600 Credit Card 22.00% $10,000 $9,300

The table shows how credit scores impact the interest rates and savings for different types of loans. Borrowers with higher credit scores receive lower interest rates, leading to significant savings over time.


Maintaining a good credit score is necessary for financial stability and opens doors to better interest rates and more favorable terms on credit cards and other types of financing. Checking the accuracy of information, disputing mistakes, making timely payments, reducing credit utilization, and seeking professional help if necessary are the key steps for borrowers to follow to improve their credit scores over time.

Jeff Gitlen

Jeff Gitlen is a graduate of the Alfred Lerner College of Business and Economics at the University of Delaware. Gitlen has spent the past five years writing and researching on personal finance issues which include credit cards, student loans insurance, and other. His writing has been featured in top news publications among them are Bloomberg, CNBC, Forbes along with Market Watch.