Credit Score Management Guide

Reviewer:  Stacey Christiansen | February 3, 2019

Higher levels of happiness and life satisfaction may be linked to people with higher credit scores. Monitoring and improving your score is free, and makes you less likely to become a victim of identity theft.

Most people don’t find out that their identity has been stolen until it’s too late. If you haven’t checked your credit score recently, you’re at risk.

Our guide will help you understand your score and how to quickly and easily improve it.

Editor Update 2/8/2019: 773 Million username and passwords have leaked – the largest data breach in history. See if you were affected.


We’ll discuss credit basics and how to improve your score with easy tricks, then talk about how to protect your financial future by monitoring your credit score.

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Credit Score Overview

A great credit score means a more comfortable financial life. On average, a higher score means lower interest rates, so borrowing money is less expensive. There are also many exclusive credit cards and loan types that are not available to people with low or average credit. 

But how do you know if your credit is good, bad, or somewhere in between? And then, what can you do to lift it? That’s what we’ll cover in this guide.

The very first step is to gain an understanding of what a credit score is and how it’s used. Or if you just can’t wait, skip ahead and check your score first!

Credit Score Management Guide:

Credit Score Basics

Before a company gives you a loan, they will evaluate your ability to pay it back within the time period specified. This can involve reviewing your income, your obligations like rent, and may include pulling a credit report. But a big part of determining your creditworthiness will be reviewing your credit score.

A loan company will try to make as much money from your loan as possible, while still insuring that they can get their money back. They’re hoping you will only make the minimum payments on your loan—because early loan payoffs mean that you are paying less money in interest for that loan.

Looking at your credit score is a common way for loan companies to make an educated guess about how likely you are to make your payments on time and in full.

What’s a FICO Score?

FICO is a type of credit score, and it gets it’s name from the Fair Isaac Corporation responsible for inventing it. Your FICO score is actually the most commonly used score in determining credit worthiness, so we’ll skip covering any other scores.

Your FICO credit score is calculated using complex mathematical models, but it’s pretty easy to understand the basic elements involved.

FICO Score Range

FICO scores range from 300 to 850, and the higher your score is, the better. Your score will fall into one of five basic categories, but don’t worry, it can change very quickly when you make the right financial moves.

Excellent: 750 to 850
Good: 700 to 749
Fair: 650 to 699
Poor: 600 to 649
Bad: 300 to 599

Elements of Your FICO Credit Score

There are the five basic factors that are used to calculate your FICO score:

  1. History of payments
  2. What percentage of your available credit you’re already using
  3. Have you taken on new credit
  4. How long you’ve been using credit
  5. The types of credit you’re using

By focusing on the areas above that you’re weakest in, you can turn your FICO score around quickly.

Paying your bills on time – 35%

If you’re paying your bills on time, companies are more likely to give you credit. In fact, at 35%, over ⅓ of your FICO score is determined by your ability to pay your debts in a timely manner.

How Much Can You Borrow, vs How Much Do You Owe? – 30%

Let’s say you have a credit card with a limit of $2,000. If you make a purchase of $200, you will be using 10% of your available credit. The lower your overall percentage is, the better. A complex equation evaluates each of your credit accounts individually, as well as all of your credit accounts combined.

New Credit Hurts Sometimes – 10%

Ten percent of your credit score is influenced by new credit. While increasing your overall credit limits can help your score, an inquiry on a new credit can take it down a few points. Especially if your application is denied. However, if you’re shopping for a loan it’s alright to get multiple inquiries, as the credit bureaus will know that you’re shopping around for a single loan and that’s not counted against you.

Length of Credit History – 15%

This part is the hardest to change. All you can do is start making better decisions about your credit. That means keeping accounts open instead of closing them, and practicing good financial decision making. If your cards don’t have annual fees, keep them open by putting some charges on them every once in awhile and then paying them off regularly. Setting up automatic bill payments is a good way to do this.

Credit Mix – 10%

Do you have credit cards, car loans, a mortgage, or all three? A responsible mix of all of these credit types can influence your score up to 10%. Just note that not having any credit cards is seen as high risk to credit bureaus.

How to Know What Your Score Is

There are three major credit bureaus: Equifax, TransUnion and Experian. You can get a free copy of your credit report from each bureau once every 12 months, and it’s wise to do so. There are a number of free services that can pull the scores from these bureaus for free and offer many free and premium features as well, like credit monitoring and identity theft protection.

We recommend that people check their credit scores three to six times each year, depending on their financial situation. If you’re not good at checking your credit regularly, a a credit monitoring service could help minimize the damage caused by idenity theft by catching it quickly.

Final Thoughts

Having a great credit score is a badge of honor. It represents financial responsibility and trustworthiness. If you have a great score, congrats! If you don’t, use some of the tips above to increase it. In order to make sure all of the hard work you do on your credit score doesn’t go to waste, we recommend some form of credit monitoring to protect your financial well-being.

Credit Score Monitoring Top Picks:

We’ve reviewed the best credit score checking and monitoring services based on accuracy, customer service, ease of use, and features. Here are our top picks.

Credit Sesame

5.0 Overall Score


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FreeScore360 Review >>

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4.7 Overall Score


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Check My Credit Now ranks highest in customer satisfaction with their easy-to-use website.

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