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Improving your credit score was never more important! Like it or not, a borrower’s credit history dictates what kind of mortgage the bank will approve.

Average credit scores are on the rise, a sure sign of recovery for the American economy after The Great Recession of 2007.  Americans are finding their financial footing again, with current average credit scores at 695.

That’s a good place to start if you want to find a decent interest rate for a mortgage. But what if you’re not at 695, or want to reach higher for even better rates? Not to worry! We’re going to show you how to improve your credit score!

Check Your Credit Score

Don’t wait for your lender to run a credit report. The law allows you to obtain one free annual report from each of the big three credit-reporting companies in the U.S. Go to to request your free report.

When you receive your report, review it closely. Check for discrepancies. Contact the listed creditors to request corrections to any errors you find. It’s not uncommon to find that you paid a creditor in full, but they did not update the credit bureaus after receiving your payment. You might be able to improve your credit score immediately by correcting errors in your report.

Pay on Time

Pay all your bills on time, every time. No excuses. Plan your monthly budget then buckle down and do everything you can to keep to your budget. It may take a little sacrifice and maybe a lot of sacrifice, but it’s worth it to improve your credit score.

Thirty-five percent of your credit score is determined by your payment history. So pay everything on time!

Pay Down Your Credit Balances

Thirty percent of your credit score is determined by how much you owe your creditors. Credit bureaus calculate a credit-utilization percentage by comparing how much you owe to how credit you have available. Since your credit-utilization score is a big percentage of your total credit score, it’s a good idea to pay down on all your credit balances.

If you’ve been paying the minimum balances on your credit cards, it’s time to start doubling down on those balances. If money is tight, consider a getting a temporary second job to help pay down your bills.

A good strategy that will dramatically improve your credit score is to pick one card and pay as much as you can afford on the monthly balance until it’s gone. Then pick another card and do the same.

Open New Credit

Ask your credit card company for a credit line increase. Or try obtaining a new credit card. Either will increase your available credit and reduce your credit-utilization score. But remember that this only works if you don’t use the new credit!

The Bottom Line

Whatever your credit score, you can improve it if you’re determined. Be mindful of every purchase and every payment. Before you know it, you’ll have a credit score that will earn you a great interest rate on the home you love!