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How to Get a Good Credit Score for Free

Improving your FICO credit score can qualify for loans and credit cards at low rates.

A credit score is a three-digit number that tells lenders how likely you are to repay debt and whether you’re a good candidate for new credit. Having a bad credit score can make it difficult to get approved for loans and credit cards. If you are approved despite having bad credit, then you’ll face higher interest rates and strict repayment terms that make borrowing more expensive.

What is a good credit score? What is a bad credit score?

There are several different scoring models. The most popular is FICO, which is used by creditors in 90% of lending decisions. The second most popular is VantageScore 3.0, which is the score used by the three credit bureaus. Both scores range from 300 to 850. Higher is always better.

FICO RangeScore Designation
Above 750Excellent
Below 550Bad
VantageScore 3.0 RangeScore Designation
781-850Super Prime
601-660Near prime
300-499Deep subprime

How is credit score calculated?

A person’s credit score is evaluated based on five factors: payment history, credit utilization, average credit age, the different types of credit a person has, and how many recent credit inquiries they’ve made.

Payment history

Learn how to review your credit report to identify errors

Payment history is the biggest factor used to calculate credit scores. Whether you make your payments on time (or not) makes up 35% of your score. If you have no missed payments and all your accounts are in good standing, you’ll rank well here. Late or missed payments will hurt your standing in this category.

The payment history factor also looks at account status. Bills in default, collections, or unpaid due to declaring bankruptcy will strongly impact this area.

Credit utilization ratio

Credit utilization ratio measures how much credit you are using compared to your total available credit. This number gives lenders an idea of how heavily you’re relying on credit.

Calculating your credit utilization is easy, it’s current balance ÷ total available credit. Let’s say you have three credit cards, each with a limit of $1,000. Your total available credit line would be $3,000 (3 x $1000). If you had a balance of $1,500 between those cards, that would come out to a credit utilization ratio of 50% ($1,000 ÷ $3,500).

A ratio higher than 30% hurts your credit score, and the lower your credit utilization ratio, the better. There is no credit score penalty for paying off your balances in full! People often think you need to carry credit card debt to have a good credit score. It’s just not true. A net utilization of 0% (if you pay your balances in full every month) is the best ratio to have.

Credit age

Credit age measures the the average length of your total credit history. People who have used credit for longer are presumed to be more experienced and profiecent at managing debt, and therefore are assumed to be more trustworthy. Having older accounts helps here.

This is also why credit experts recommend that you should keep old accounts open. Even if you don’t use an old account regularly, find a way to use it occasionally. This will keep the account active and prevent unintended damage to your credit score.

Types of credit

This is one of the two smallest scoring factors. It looks at the types of debt that you hold. Basically, lenders want to see a good mix of credit cards and loans. You also want to have traditional loans, like mortgages, auto loans, and student debt.

New credit

This factor looks at the number of times you’ve had your credit pulled — your credit score and report has been accessed — within the past six months. Hard credit inquiries are generated whenever a credit check is authorized, such as submitting loan or credit application. Too many inquiries can imply you’re taking on too much debt at once, which doesn’t look good to potential lenders.

How to Improve Your Credit Score for Free

Taking steps to rebuild your credit puts you on the road to a better credit score

Raising your credit score doesn’t require expensive third-party services. In fact, you don’t even need to pay someone at all. Follow these steps (and stick with them), and you’ll be able to build and repair credit yourself.

  • Review your credit report to see how many negative items appear that could hurt your score. If you see any negative items that are mistakes, go through credit repair to dispute them. Winning disputes can immediately improve your credit by removing negative items, like missed payments.
  • Keep all your accounts open, active and in good standing. This means making all your debt payments on time, making at least one purchase on each credit card every six months, and preventing bills or medical expenses slip into collections.
  • Keep credit card balances to a minimum. Never run them up to the limit and try to use no more than 30% of your available credit.
  • Only apply for new loans or credit cards when you have a strategic need for them. Try to avoid applying for more than one new account every six months.

Follow these steps diligently and your score will steadily increase. No fancy tricks, no expensive credit monitoring services needed. Just good, old-fashioned legwork.


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Do you have what it takes to be a credit score superstar? Learn about the five credit score factors that determine credit score and how it’s calculated….

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If maxed out credit cards are hurting your credit score, we can help. Talk to a certified credit counselor to discuss options for debt consolidation.

How long does it take to raise your credit score?

Take the right steps to achieve a good credit score

If you’re starting from a bad score, it usually takes about six months to one year to build credit to a fair score. The length of time depends on your past credit profile. Negative items like bankruptcy or foreclosures are harder to offset with positive actions. Still, even with one of these remarkably bad items, you can still build credit effectively within 24 months.

Going from bad to excellent may take as little as three to five years. So, even if you have a score that’s less than 500 now, with a little work you could achieve a 700 credit score or higher in about 36-60 months. And it’s worth the effort! A better credit score can save hundreds and even thousands of dollars when paying off loans and credit card balances.

Make the Most of Your Credit Score

Make the Most of Your Credit Score


Having a good credit score is essential. It makes it easy to get approved for new credit and allows you to borrow money with the best rates and terms. This guide will teach you how credit scores are calculated, what counts as a good score, and what you can do to ensure you maintain the highest score possible.

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Consolidated Credit has answered several Ask the Expert questions related to credit scoring. Here are some of the top questions we’ve received:

Have a question about your credit score? Ask our team of certified credit counselors to get the answers you need!