Want to Boost Your Credit Score? Try These 4 Money Moves That Helped Me

You might assume that someone who writes about personal finance for a living has never had a problem with their finances. Well, think again. I spent years in an underpaid profession, struggling against mounting debt to make positive changes to my financial picture. I also went through a short sale of the house I shouldn't have bought, which tanked my credit score. (Admittedly, the impact was less severe than it would've been had I lost the house to foreclosure). Oh, and I've been through two divorces, both of which cost me in different ways.

In short, I have had my share of money troubles, and I've seen the impact on my credit score. These days, however, I'm rocking a FICO® Score above 800. Here are four ways I made it happen, as well as an extra effective way to improve your credit score that's worth considering.

1. Open new credit accounts sparingly

Every time you open a new credit card account or take out a new loan, the lender performs a hard credit check, which lowers your credit score by a few points. If you only apply for credit every so often (say, once or twice a year), the point loss shouldn't have a big impact on your score. But if you apply for new accounts all the time, you'll see a corresponding drop in your credit score.

Plus, having a lot of new accounts is likely to make lenders nervous. It could look as if you're having trouble managing your money and are overly reliant on credit to get by.

2. Stay on top of your bills

The biggest piece of your FICO® Score (the credit score most commonly used by lenders) is payment history -- it represents a whopping 35% of your score. As such, focusing on making on-time payments to your creditors every single month can help your credit score in a big way.

I managed to keep my score above 700 for several years despite having a lot of high-interest debt. That's largely because I never made a late payment in all that time.

3. Pay down debt, if you can

I added 100 points to my credit score between 2022 and 2023 by paying off all my debt. I used the snowball approach, which involved paying off the smallest balances first. I also took on a side hustle to increase my income.

Sure, paying it off was a drastic move. However, it was step one toward my actual goal: ending up much deeper in debt by taking on a mortgage and buying a house. I'll note here that a mortgage is often considered "good debt."

You don't need to go whole hog like I did -- though I gotta say, giving myself that clean slate felt great. If you can pay off enough debt to get below 30% credit utilization on your accounts, you'll see a positive impact on your credit score. So if you have a $10,000 credit limit across three credit cards, it's best not to carry more than $3,000 across all of them at any given time.

4. Use credit-monitoring services

With credit scores, as in all things, knowledge is power. And good news! Many credit card issuers will automatically enroll cardholders in their proprietary credit-monitoring services. You'll hear from these services whenever a lender looks at your credit report or a new account is added to your record. When I applied for that mortgage a few months ago, I received an avalanche of emails about it. Some will also update you with your credit score every month.

Paying attention to these emails may not move the needle on your credit score. But that knowledge may encourage you to keep paying down debt or making those on-time payments. Plus, if you receive word that a lender checked your credit and you didn't apply for a loan or credit card, someone might be trying to steal your identity. The early warning means you can take action ASAP.

Another helpful move I haven't tried

A secured credit card can be another easily accessible means to improving your credit score, though I have no personal experience with it. To open a secured credit card, you put down a deposit equal to your credit limit.

If you're new to credit or have struggled with it in the past, you may have difficulties opening accounts and establishing a payment history. It's much easier to be approved for a secured credit card because the card issuer isn't really taking any risk. If you don't pay your bills, the debt comes out of your deposit.

Some of the best secured credit cards earn rewards (like a certain percentage of cash back on your spending) like traditional cards do. They also offer you the chance to "graduate" to a traditional card after a period of time. Opening one of these cards and making on-time and in-full payments every month can help you create a positive payment history, which will improve your credit score.

According to Experian data, the average credit score among U.S. consumers was 715 last year. This is pretty solid, but there's still room for improvement. If your credit score isn't where you'd like, try the moves above to get on the right track.