5 simple & effective ways to improve your credit score


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A good credit score can unlock very important doors that make your life easy and save you thousands of dollars over time. It not only makes it easier to get loans and credit cards, but it is vital if you want a low-interest rate on your loans. But people often think it is very difficult to get and maintain a good credit score and assume it is a time-consuming process.


In this post, I’ll share five easy yet effective ways to improve your credit score!

1. Check your credit report often

Every couple of months, you should check your credit report from each of the three credit bureaus – EquifaxExperian and TransUnion. Look for any inaccuracies in the credit report, and if you find any, dispute them. If you spot these mistakes, you can make sure they are changed and undo any damage to your credit score.

2. Pay all your bills on time

The most important factor affecting your credit score is your payment history; it makes up 35% of your credit score. So it’s crucial to avoid late payments. You can set up monthly reminders or automatic bill payments to ensure you always pay all your bills on time. Even a one-off late payment on your credit report will negatively impact your credit score.



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Ideally, you should also pay your credit card balance in full every month. But if you cannot afford to do that, it is imperative that you at least pay the minimum amount due.

3. Don’t overuse your credit cards

The second most important factor – impacting 30% of your credit score – is the credit utilization ratio, which is the ratio of the amount you use on your credit cards divided by your total available credit limit across all cards. Maxing out your credit cards significantly hurts your credit score by increasing your credit utilization ratio. Instead, try to limit your spending to 30% or less of your available credit to improve your credit score. If that’s not possible, you can try to increase the credit limit or apply for a new credit card.


You should also work on paying off the outstanding debt on your cards as quickly as possible to lower your credit utilization rate. For help with this, watch our video 7 easy ways to get out of credit card debt fast.

4. Don’t cancel credit cards when you stop using them

A fairly important factor in calculating your credit score is the length of your credit accounts. So the longer you have had your credit cards for the better. Instead of closing credit card accounts you no longer use, keep them open, but use them very infrequently. An easy way to do this is to use the card to pay for a monthly subscription like a streaming service so that you don’t have to worry about remembering to use it.



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5. Don’t apply for multiple credit cards at the same time

When a company is processing your credit card application, they check your credit score, which is known as a hard inquiry. This typically lowers your score temporarily. Multiple hard inquiries close together can lead to a significant dip in your credit score. Even if you are considering multiple credit cards, instead of applying for them all at once, space out your credit card applications over a longer period of time.



This article
originally appeared on 
EasyPeasyFinance.com and was
syndicated by


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The average credit score & credit card debt by state


Fair Isaac Corp.’s FICO Score and VantageScore are two of the most widely used scoring models in the country. Both models range between 300 and 850 — and the higher the score, the better. The average credit score varies greatly among different populations, ages and income levels, some of which are explored below.


The average credit score in the U.S. is at an all-time high of 711. This coincides with what the Consumer Financial Protection Bureau defines as “prime.”

About 1 in 5 American adults either have no credit history (“credit invisible”) or are unscorable. As a result, these individuals will have difficulty obtaining new lines of credit.


In the eyes of lenders, credit scores fall into several buckets, which indicate how risky it may be to extend credit to an individual. Outside of playing a role in approvals for a loan or credit, these scores can also impact an individual’s lending terms. Perhaps the most important terms among those are interest rates.


The higher an individual’s credit score, the lower their quoted APR will typically be.

FICO credit scores break down in the following manner:

  • 800 to 850: Exceptional
  • 740 to 799: Very good
  • 670 to 739: Good
  • 580 to 669: Fair
  • 300 to 579: Very poor

This means the average credit score of 711 is in the good range.


Though the average credit score has generally improved since 2005, slight dips were seen around the Great Recession that ended in 2009. A large number of people declaring bankruptcy or defaulting on their loans would have caused their credit scores to plummet, which in turn would have affected the overall average.





Millennials (ages 24 to 39) have an average credit score of 680, while baby boomers (ages 56 to 74) have an average credit score of 736.


The average FICO Score tends to improve with age.

The average credit scores coincide with the financial situations facing younger generations. It’s usually around the millennial age range that major expenses and debt begin to rack up — such as weddings and first mortgages, among others. Despite their ages, millennials hold an average of $4,322 in credit card debt.


The other age group whose average credit score skews lower is Generation Z (ages 18 to 23). A contributing factor to this is the limited access to credit this age group faces. Following the 2009 CARD Act, it became significantly harder for 18- to 21-year-olds to open new credit card accounts. As a result, many young adults don’t begin building a credit file until later in life — driving averages down.


Americans of all ages owe debt. In fact, U.S. household debt spiked to $14.35 trillion in the third quarter of 2020 — the latest available data — amid the coronavirus pandemic, according to the Federal Reserve Bank of New York.


And that debt is growing while more people remain out of work. The federal unemployment rate was 3.5% in February 2020 before spiking to 14.8% in April 2020. (It’s been dropping but was still at 6.7% in December 2020.)



Experian / Value Penguin


The higher one’s income level, the higher their average credit score tends to be.

While debt-to-income ratio doesn’t play a direct role in determining one’s credit score, it does have an indirect one. One of the factors lenders consider when modeling an individual’s credit risk is their credit utilization — the percentage of total available credit a consumer is using month to month.


To improve one’s credit score, credit utilization should generally be kept below 30%. The lower one’s income is, the more a consumer may rely on their credit for their expenditures.


Another way income may play into credit utilization, and ultimately one’s credit score, is by determining one’s credit limit. Credit issuers look at borrowers’ incomes when deciding on the amount of revolving credit that should be issued.


The lower one’s income, the lower their line of credit is likely to be.

In turn, by having significantly lower credit limits, it becomes easier for lower-income individuals to eat up a larger portion of what’s available, increasing their credit utilization.


The graphic belows shows that median credit scores are highly correlated to income.


For context:

  • Low income: Up to 50% of the area median income
  • Moderate income: Greater than 50% and up to 80% of the area median income
  • Medium income: Greater than 80% and up to 120% of the area median income
  • High income: More than 120% of the area median income

Aside from the ability to make monthly payments on time, which may be difficult, people with lower incomes have access to less credit, meaning their credit utilization would be higher with smaller debt. This, in turn, lowers credit scores, which can, in turn, lower credit availability.


Below are the average credit scores throughout the U.S. by ranking.


Federal Reserve Bank of New York / Value Penguin


  • Average credit score: 675
  • Average credit card debt: $4,587




  • Average credit score: 684
  • Average credit card debt: $5,127




  • Average credit score: 686
  • Average credit card debt: $5,047


Sean Pavone


  • Average credit score: 688
  • Average credit card debt: $5,848




  • Average credit score: 689
  • Average credit card debt: $5,310




  • Average credit score: 689
  • Average credit card debt: $5,693




  • Average credit score: 690
  • Average credit card debt: $5,271




  • Average credit score: 690
  • Average credit card debt: $4,791


Tara Ballard


  • Average credit score: 694
  • Average credit card debt: $4,948




  • Average credit score: 695
  • Average credit card debt: $4,686


hkim39 // istockphoto


  • Average credit score: 695
  • Average credit card debt: $5,422


Byelikova_Oksana / istockphoto


  • Average credit score: 697
  • Average credit card debt: $5,006




  • Average credit score: 698
  • Average credit card debt: $4,521


Thomas Kelley


  • Average credit score: 701
  • Average credit card debt: $5,623




  • Average credit score: 703
  • Average credit card debt: $5,121


” Darwin Brandis”


  • Average credit score: 706
  • Average credit card debt: $5,157




  • Average credit score: 707
  • Average credit card debt: $4,651




  • Average credit score: 707
  • Average credit card debt: $4,950




  • Average credit score: 710
  • Average credit card debt: $5,462




  • Average credit score: 711
  • Average credit card debt: $4,888




  • Average credit score: 712
  • Average credit card debt: $5,977




  • Average credit score: 713
  • Average credit card debt: $5,671




  • Average credit score: 714
  • Average credit card debt: $6,617




  • Average credit score: 714
  • Average credit card debt: $4,692




  • Average credit score: 716
  • Average credit card debt: $5,120




  • Average credit score: 716
  • Average credit card debt: $5,365




  • Average credit score: 717
  • Average credit card debt: $5,063




  • Average credit score: 717
  • Average credit card debt: $5,992




  • Average credit score: 718
  • Average credit card debt: $5,414




  • Average credit score: 719
  • Average credit card debt: $5,256




  • Average credit score: 719
  • Average credit card debt: $5,182




  • Average credit score: 720
  • Average credit card debt: $4,582




  • Average credit score: 720
  • Average credit card debt: $5,080




  • Average credit score: 721
  • Average credit card debt: $4,676




  • Average credit score: 721
  • Average credit card debt: $5,978




  • Average credit score: 723
  • Average credit card debt: $6,040




  • Average credit score: 723
  • Average credit card debt: $4,900


” 4kodiak”


  • Average credit score: 725
  • Average credit card debt: $5,541


Jacob Boomsma / istockphoto


  • Average credit score: 726
  • Average credit card debt: $4,289




  • Average credit score: 726
  • Average credit card debt: $4,785




  • Average credit score: 727
  • Average credit card debt: $5,614


Art Wager


  • Average credit score: 727
  • Average credit card debt: $4,681




  • Average credit score: 728
  • Average credit card debt: $4,819




  • Average credit score: 729
  • Average credit card debt: $5,141




  • Average credit score: 729
  • Average credit card debt: $5,327




  • Average credit score: 730
  • Average credit card debt: $4,865




  • Average credit score: 730
  • Average credit card debt: $5,238




  • Average credit score: 731
  • Average credit card debt: $4,633




  • Average credit score: 731
  • Average credit card debt: $4,653




  • Average credit score: 732
  • Average credit card debt: $4,376




  • Average credit score: 739
  • Average credit card debt: $4,767



This article originally appeared on ValuePenguin.comand was syndicated by MediaFeed.org.




Featured Image Credit: Depositphotos.