Credit reports and scores

My Credit Score Is 825. These 3 Things Helped Me Get There

Your credit score is a three-digit number that has a major impact on your financial life — finance expert Tori Dunlap called it “your adulting GPA.” I felt pretty good when I managed to get mine above 800 late last year after making some big changes to my career and finances.

FICO® Scores between 800 and 850 are considered “exceptional,” and FICO is the scoring model used by a majority of lenders. A credit score at this level enables a consumer to borrow money (say, in the form of a credit card, personal loan, mortgage, and so on) at the lowest interest rate possible, which means saving on borrowing costs.

My credit score has been looking pretty great lately, but getting to this point was definitely a process. Here’s how I did it.

1. I pay all my bills on time

If your credit score is looking lower than you like, the easiest and most effective thing you can do to boost it is just this: Always pay your creditors on time. Why is this move in particular so crucial? Payment history is of the utmost importance to lenders when they decide whether you can borrow money from them (and at what interest rate), because it says how likely you are to pay them back. And as such, payment history makes up the largest percentage of your FICO® Score at 35%.

I’ve had my share of financial hiccups, most notably a short sale on a house I once owned. This had a negative impact on my credit score (thankfully less of one than if I had gone through foreclosure). At that time, I made a vow to myself that I’d make every single debt payment on time and in full, every month. And I’ve stuck to it. As a result, my credit score was over 700 (“good” by FICO standards), even before I made the next crucial credit score move.

2. I paid off all my credit cards

Last year, I paid off all my credit card debt, thanks to increasing my workload via freelancing, and subsequently putting in a ton of hard work. During this process, I watched my credit score tick steadily upward. In June 2022, I had a FICO® Score of 722. By the time I paid everything off and my score was updated in November, I reached 810, and moved up to 825 from there.

Your credit utilization ratio (the percentage of credit extended to you that you’re using at any given time) is the second-largest percentage of your FICO® Score, at 30%. And conveniently, you should aim to keep this percentage below 30%.

In my 700-score days, my ratio was higher than this, but through a combination of paying off all debt and also boosting my overall credit limit (more on that below), I am now using less than 1% of my available credit at any given time. I pay off my balances often, usually weekly (this isn’t necessary, but it gives me peace of mind). To keep your credit utilization low and save money, watch your spending and pay off your balances at least monthly, before interest is charged.

3. I apply for new credit sparingly and strategically

The final piece of my credit score puzzle is applying for new credit sparingly and also strategically. I work here at The Ascent, and I get to nerd out about credit cards with my colleagues. We review all the best credit cards on the market, and many of them have very appealing perks. Knowing that applying for new credit can negatively impact a credit score, I’ve opened just two new cards since I got out of debt.

The first was a stellar grocery rewards card, because I love to cook and I drop a lot of green at the grocery store. And the second was one of the top travel credit cards, because I had international travel plans for this year and wanted to save money on foreign transaction fees and have my spending earn me points to save on future travel. Between these two cards, I earn at least 1% back (or 1X points) on all of the expenses I would put on a credit card, and for some categories (groceries, gas, two streaming services, and travel purchases), I earn more. Plus, I’m not carting around credit cards that don’t work for my spending.

How can you improve your credit score?

Now that you know what factors helped me get to an 825 FICO® Score, you might be wondering how to boost your own credit score. Following my steps above (always paying bills on time, paying off debt, and applying for new credit sparingly and strategically) can definitely help.

If it’s been a while since you peeked at your credit report, I definitely recommend having a look. You can access your credit reports for free every week for the rest of the year! Look through yours and make sure all accounts and data are accurate. Credit report errors are common.

You might also have old delinquent accounts listed that should have been removed by now (on your credit report, nothing is forever — so don’t lose hope for your credit score if you’ve had a big financial mishap like a foreclosure or bankruptcy). If you find something hinky, you can dispute it with the credit bureaus, and if errors and weirdness are removed, your credit score will improve.

If I could reach 825, so can you. Employ these tips and watch your credit score rise accordingly.

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