How to check and improve your credit score.
When applying for a loan or a line of credit, it can be hard to know for sure if you’ll get approved. Institutions pull a variety of information, and the key piece that often decides your approval is your credit score.
But, where does that credit score come from and how is it calculated?
Today we have a system where three agencies within the US report information tied to a person’s social security number. That information is used to create the most popular and widely used credit score for each person which is called the FICO® score.
So, how does a credit score impact your life?
Most of us are probably familiar with how a score can help you get approved for a loan or credit card, but there are more ways a credit score can impact you.
Here’s a list of what a good credit score can help you accomplish:
- Get approved for a loan - such as a mortgage or car loan
- Get an apartment - landlords will sometimes pull your credit for approval
- Access better credit cards with better rewards
- Get better rates on loans, saving you money
- Earn discounts on insurance premiums
- Have security deposits on utilities waived
Now, all of that might make sense, but you may still be wondering - “how do I keep track of my credit score?” Good question! Here are some ways to get started.
How to Monitor your Credit Score
You can find plenty of services for keeping track of your credit score, but keep in mind that not all credit monitoring services are the same. Some offer basic monitoring and an updated score, while others offer benefits like identity theft insurance and more. To get the added features, you’ll have to sign up for a paid service. However, there are some great free options that give updates on your score and suggestions to help you improve it.
Free credit score monitoring
Federal law requires that a free credit report be offered to everyone in the US every 12 months. One way you can access yours is by visiting annualcreditreport.com. The Federal Trade Commission (FTC) outlines more ways to access your free credit report here.
You can also access 6 more free credit reports a year through 2026 by visiting equifax.com.
Those are great free options, but they only allow a limited number of reports each year. Why might you want to monitor your credit score more often? Checking your credit score can help you see any drastic changes that may be the result of your identity being stolen. You may also be trying to improve your score for a loan and checking in often can help you see the progress.
Thankfully there are some free options that allow you to do this. They offer features like weekly updated credit scores, credit monitoring, alerts, and suggestions for improvement.
Here are three great FREE options:
Additional “kind of” free credit monitoring
There are other options out there that are “kind of” free, and the reason we say “kind of” is because they come as a service for holding an account with the institution offering it.
Like our Keeps account which comes with free credit scores1,2,4 and identity theft monitoring1,2,3,4, which can be a great option when you’re starting to establish/build credit or just for keeping tabs on it.
Other banks and credit card providers often offer a similar service if you open an account or sign up for a credit card. If you are already looking to open a bank account or get a credit card, it could be a good idea to find one that has this added feature.
Paid credit monitoring
There are plenty of paid options out there for tracking your credit score. Having a paid credit monitoring service allows you to have a more complete view of your credit history, as most paid services check all three credit reporting agencies. The paid plans also typically come with benefits like identity theft insurance or real time alerts for fraud.
Here are three great PAID options:
If monitoring your credit score is how you keep tabs on it, then understanding what affects your score is how you truly take control of it and improve it. Here’s what makes your credit score and what you can do to raise it.
How to improve your credit score
Your FICO® Score is made up of 5 different categories that impact your score at different levels. You can see what makes up most of your score below. Read on to see more details about each category and what you can do to improve your score.
What goes into your FICO© Score?
Payment History - 35%
Your payment history is the record of payments you make on any debt like credit cards, student loans, or mortgages. Missing a payment or letting an account go delinquent will negatively impact your score. Learn more below.
Amount Owed - 30%
This refers to the overall amount of money you owe across all accounts. It also includes a credit utilization ratio which takes the amount of money you owe on revolving accounts compared to how much credit you have been given access to. Learn more below.
Length of Credit History - 15%
This is the average length of time your accounts have been opened. A longer history of holding credit shows that you are able to handle the debt. Learn more below.
Credit Mix - 10%
Credit mix basically means the diversity of accounts you have opened. Learn more below.
New Credit - 10%
New credit is simply the number of new credit accounts you have opened and how many inquiries you have on your score. Learn more below.
Length of Credit History
- Payment History - Highest Impact: 35% of your FICO score - Your payment history is the record of payments you make on any debt like credit cards, student loans, or mortgages. Missing a payment or letting an account go delinquent will negatively impact your score. Delinquent means the account has been past due for a full billing cycle, which will be reported to the credit bureaus. Since it has the highest impact, this is the category you want to focus the most on improving and keeping up with.
- Make all of your payments on time.
- Keep any accounts from remaining delinquent and going to collections - it could stay on your record for 7-10 years.
Goal: Make 100% of payments on time
How to boost your score:
- Don’t max out your credit cards and keep them paid down - experts say that keeping your balance under 30% of the limit is a good goal. Under 10% is best.
- Pay more than the minimum payment - Paying off your credit card or student loans faster with larger payments will decrease the amount you owe and show the ability to handle debt well.
Goal: To owe less on higher amounts of available credit
How to boost your score:
- If you don’t have an established credit score, you can start building credit by opening a credit card (just remember to make payments on time!) We’ll give some more ideas on building credit in another section later.
- Hold on to your oldest accounts whether you use them or not, and make sure they are up to date and paid down.
Goal: A longer credit history
How to boost your score:
- Open both revolving accounts and installment accounts. Installment accounts are loans like mortgages, student loans, or car loans where there is an initial loan with interest that you pay back in fixed payments monthly.
- Show you can handle multiple types of accounts by keeping them all paid on time.
Goal: Diversified credit account types
How to boost your score:
- Avoid opening too many new accounts at the same time.
- Even applying for credit can have a negative effect on your credit score since it adds inquiries, so avoid applying for credit too often, even if you don’t open an account.
Goal: A low number of new accounts
How to boost your score:
What if I don’t have a credit score?
If you don’t have a score then you need to “build” your credit score. Building your score comes down to opening accounts that show you are able to handle debt. If you’ve ever tried to do this, you may have noticed a strange paradigm.
In order to open an account, you need a good score, but in order to have a score, you need to open an account. So where do you get started? Here are some great ways to build credit if you don’t have a score:
- Co-sign with someone who has credit - A co-signer is someone with established credit who is willing to put your loan or credit card in their name as well. It can help you get approved when you don’t have credit or if your score is low.
- Become an authorized user - This is similar to using a cos-signer, but instead this puts your name on someone else’s credit card. You don’t have to carry the card or even use it. This situation simply puts the payments made on this card on your credit history.
- Open a Secured Credit Card - A secured credit card is a credit card that requires a security deposit to open. If you can’t get approved for an unsecured credit card (which doesn’t require a deposit) then this could be one of your best options to get started.
- Use your current bills - There are tools out there that allow you to get credit for paying bills you may already have. Experian Boost is one tool that allows you to include payments like your cell phone bill and utility bill put on your credit report. There are also some that use rent payments such as Rental Kharma
Want to build credit? Check out our Southern Bank Credit Cards here.
Can I improve my Credit Score Quickly?
Your score will go up over time if you stay away from making late payments or adding more debt. But, are there ways to raise your credit score fast?
Yes and no. The length of time it takes to improve a score really depends on why your score went down and your ability to resolve the issue. If your score goes down from a single missed payment, you could quickly bring it back up by making the payment before it goes delinquent. On the other hand, if you let an account go delinquent, it could stay on your report for 7-10 years, making it harder to fix.
Here are some things that could improve your credit score quickly:
- Getting your payment history up to date
- Paying off debt in bigger payments
- Remove derogatory marks – if you get an account up to date you may be able to ask the institution to remove the derogatory mark on your account. You can also challenge one if it is inaccurate. You can learn more about how to dispute a mark on your credit report here.
- Ask for a credit limit increase on revolving accounts to lower your credit utilization ratio
- Become an authorized user on the credit card of someone with good credit - this adds the line of credit to your account and can help lower your credit utilization ratio.
Keeps account Disclosures:
1 Special Program Notes: The descriptions herein are summaries only and do not include all terms, conditions and exclusions of the Benefits described. Please refer to the actual Guide to Benefit and/or insurance documents for complete details of coverage and exclusions. Coverage is provided through the company named in the Guide to Benefit or on the certificate of insurance.
2 Benefits are available to personal checking account owner(s), and their joint account owners subject to the terms and conditions for the applicable Benefits. Some Benefits require authentication, registration and/or activation. Benefits are not available to a “signer” on the account who is not an account owner or to businesses, clubs, trusts organizations and/or churches and their members, or schools and their employees/students.
3Credit file monitoring may take several days to begin following activation.
4Insurance Products are not insured by the FDIC or any Federal Government Agency; Not a deposit of or guaranteed by the bank or any bank affiliate.