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Improving Your Credit Score: 3 Tips You Should Remember

Updated: May 6, 2021

Cnsider a good credit score as an investment. Whether you’re buying a home or taking out a loan for an emergency, it pays to have a good credit standing even before you get yourself in scenarios like these.

How is a Credit Score Determined?

There’s an arduous process in determining your credit score. Your credit score is analyzed by evaluating your credit history and calculating the risks when you pay a loan for 90 days or more in the next two years.

The two most known types of credit score in the United States are the VantageScore and FICO. Lenders, with a majority using FICO scores, rely on these two scores when deciding to accept your application.

How do these scores compute your creditworthiness?

  • Your credit utilization

  • Your manner of paying bills (how late and how recent)

  • Your experience holding a mixture of accounts

  • The average age of your accounts

  • How many times you applied for credit in the past year

Ways to Improve your Credit Score Effectively

1. Check your credit scores from different sources

What you may not know is that there can be hundreds of your credit reports. Therefore, you can have different credit scores. You may not specifically confirm which report will be used by the lenders, which is why you need to check your credit reports from TransUnion, Equifax, and Experian.

There are reports of credit fraud and mistakes, so make sure to have them checked before this can affect your real credit score. Federal law allows you to dispute an error with the appropriate credit reporting agency. This may also help improve your credit score.

2. Pay your bills on time

One of the standards for measuring creditworthiness is if the person pays their bills on time, so avoid making delayed payments. With FICO, your payment history is worth 35% of your credit score. Emergency funds and automatic payments may help you solve issues with late payments.

3. Lower the rate of your credit utilization

Another crucial factor when it comes to analyzing your credit score is your debt relative to your current credit. FICO uses 30% of your credit score based on your credit report's "Amounts Owed" section.

A credit utilization ratio refers to the relationship between your credit limits and balances. A good credit utilization may vary on the scoring system that the lender utilizes. However, as a rule of thumb, pay your credit card balances on time monthly. If you’re having a hard time doing this, you may need to have your credit limit increased.


It is vital to improve your credit score to enjoy the advantages of having a good credit score, such as easier loan approval, payment of utility expenses, lower credit card interest rates, better car insurance rates, and more. When looking for a company offering personal lending and installment loans, ensure that you get in touch with reliable ones.

We at Parkway Finance believe in the value of good relationships, especially during times in need. We can assist in making your life easier with installment loans. We aim to make the borrowing process simple and fast. Apply now!

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