6 Proven Steps to Clean Up Your Credit Score and Build a Stronger Financial Future

Improving Your Credit Score Is Possible

If your credit score isn’t where you want it to be, don’t panic—you’re not alone. Whether it’s a missed payment, maxed-out card, or simply not knowing where to start, improving your credit score takes time and consistent effort. The good news? You can fix it.

Understanding what impacts your credit score and taking actionable steps will put you back on track. Let’s break down what determines your credit score and explore six effective strategies to clean it up and build a strong financial foundation.

What Determines Your Credit Score?

Your credit score is calculated using scoring models like FICO and VantageScore. These models give you a number ranging from 300 to 850. While the formulas are proprietary, we know the factors that matter most:

1. Payment history (35%): Do you pay on time?
2. Credit utilization (30%): How much credit are you using compared to your total limit?
3. Credit history length (15%): How long have you been using credit?
4. Credit mix (10%): Do you use different types of credit, like loans and cards?
5. Recent applications (10%): How often do you apply for new credit?

Now that you know the factors, let’s dive into steps you can take to clean up your credit score.

1. Dispute Errors on Your Credit Report

Start by checking your credit report for errors. Mistakes like an incorrect missed payment, outdated account information, or even fraudulent accounts can harm your credit score.

Here’s what to do:

• Obtain free credit reports from annualcreditreport.com.
• Look for inaccuracies such as wrong balances or missed payments you didn’t make.
• Dispute errors directly with the credit bureaus (Experian, Equifax, and TransUnion).

Fixing these errors ensures your credit report accurately reflects your financial behavior.

2. Lower Your Credit Utilization Ratio

Your credit utilization ratio compares how much of your available credit you’re using. To keep your credit score healthy, aim to use no more than 30% of your total credit limit.

How to Reduce Credit Utilization:

• Pay down your balances as much as possible.
• Make multiple payments throughout the month to keep your balance low.
• Ask for a credit limit increase—but only if you can avoid overspending.

A lower utilization ratio signals to lenders that you’re responsible with credit.

3. Report Rent and Utility Payments

Did you know that your on-time rent and utility payments can help you build credit? While these payments aren’t always reported to credit bureaus, you can take steps to make them count:

• Ask your landlord or property manager if they report rent payments.
• Use third-party services like RentTrack to report rent and utilities to credit bureaus.

This strategy allows you to showcase consistent payment behavior, improving your credit score over time.

4. Consider a Credit-Building Loan

Credit-builder loans are designed specifically to help improve your credit score. These small loans are typically offered by local banks or credit unions. Here’s how they work:

1. The loan amount is held in a savings account you can’t access right away.
2. You make regular payments over time.
3. Once the loan is paid off, the funds are returned to you.

The key benefit? Your on-time payments are reported to credit bureaus, helping you establish a positive payment history.

5. Become an Authorized User or Get a Co-Signer

If someone with good credit (like a family member) is willing to help, you can boost your score in two ways:

1. Authorized User: Being added to someone’s credit card lets you benefit from their good credit behavior. Payments and credit utilization on that account can reflect on your credit report.
2. Co-Signer: A co-signer agrees to share responsibility for your loan. Lenders are more likely to approve your application, and responsible repayment will improve your credit score.

Just ensure you and the account holder communicate clearly to avoid missteps.

6. Pay Bills on Time (And More Than the Minimum)

Payment history makes up the largest chunk of your credit score—35%. This means paying your bills on time is essential. Even a single missed payment can drop your score significantly.

Pro Tips for Staying On Track:

• Set up automatic payments or calendar reminders.
• Always pay at least the minimum payment, but try to pay more to reduce your balances faster.
• If you’ve missed payments in the past, start fresh now and build consistency.

Over time, a clean payment history will improve your credit score dramatically.

Building Credit Takes Time—Stay Consistent

Improving your credit score doesn’t happen overnight, but the effort is worth it. By disputing errors, keeping your utilization low, paying bills on time, and exploring tools like credit-builder loans, you’ll create a foundation for better credit.

Want to take your credit-building journey to the next level?

Ava Finance can help. Ava offers a simple and effective way to build credit responsibly. Whether you’re starting from scratch or looking to bounce back from past mistakes, Ava provides tools to monitor your progress and improve your credit score step by step.

Your financial future is in your hands—and with the right strategies, you can achieve the credit score you deserve.