The Reality of Improving Your Credit Score

by Scott Markland

If you’re someone with a less than stellar credit score, you’ve probably felt the effects of it. Less than stellar credit means facing higher interest rates and maybe more problems obtaining a loan. American consumers feel overwhelmed when it comes to credit education. I believe this stems from basic credit conversations consumers have with one another, but neither is properly informed about the straightforwardness of credit improvement. Where do you start?

Improving your credit history needs to take priority. Why?

Lenders check credit history to determine the risk level of the borrower. After determining a risk level, the interest rate is determined. Interest rates are what the lender charges for letting you borrow money from them. Therefore, the less risky the borrower, the lower the interest rate and more likely the borrower will obtain a loan from that particular lender.

Improving your credit score—tied directly to your credit history— is the only way to improve your interest rates, which improves your savings. Financial security is something to strive for. Facing high interest rates makes it hard to be financially secure when you have a 500 or 600 dollar car payment, and nearly half of it doesn’t go towards your principal amount.

When you think about it, does it seem okay to pay half your car payment directly to the lender for loaning you the money for the car?

FICO Scale Graphic

What are the best ways to improve your credit score?

There are a couple things: First: You will always face an improved credit score when you pay off a loan or credit card balance on time. If you’re struggling with your credit score, the number one way to increase your score and better your history is to pay your bills on time, every time. Second: The second biggest way to increase your credit score is to keep your amounts owed lower. A lot of different types of debt can impact your score. Different types of debt being a lot of money owed on credit cards, while also have a lot of money owed on your auto and home loan, etc.

How long does it take to see a drastic improvement of your credit score?

Everyone is different. Some people have an outstanding loan balance, pay off the few thousand dollars and their score dramatically raises. Some people do the same thing and there’s not as much improvement. (Hey, some improvement is better than none or negative.)Why? Because your credit score is made up of five things.

credit-score-make-up (2)

I stress paying all your loans on time and don’t rack up your debt—aka amounts owed—for optimal results.

How do lenders determine your credit worthiness?

It’s important to know lenders each have their own set of criteria for how to determine which risk tier each borrower will fall into. For example, some lenders won’t loan money to borrowers below a certain credit score. Each lender has their own criteria to determine who they will and will not loan to. One thing remains constant though: Borrowers with better credit history and credit scores receive the better interest rates and savings.

It pays to pay your bills.

About The Author


Scott Markland


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