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How Can You Improve Your Credit Score?


We’re excited to bring you ēCO’s third blog in our credit series. If you missed the first two, you can use the links below:

“How do I improve my credit score?” is one of the questions we hear most frequently. While there’s no quick fix to a perfect credit score, we have a few tips to help.

  1. Pay your bills, and pay them on time!

If you checked out the “How is Your Credit Score Calculated?” blog, you’ll notice that payment history is the biggest factor in determining your credit score. Because payment history makes up such a big portion, paying your bills and paying them on time can have a huge positive impact on your credit score. You’ll also want to bring any past due accounts current as quickly as possible.

If you have some late payments on your credit report, time will help. Late payments can legally remain on your credit report for up to seven years, but their impact on your credit score declines over time.

Pro-tip: never miss a payment when you use services like ēCO’s Bill Pay. Setting up bills in Bill Pay allows you to set the payment amount and date; then, you can rest easy knowing your bills will automatically be paid. For loans with ēCO, we can also help you set up direct deposit or payroll deduction. It might even get you a slight rate reduction!


  1. Keep balances low on credit cards and revolving credit.

Before we dive too deep, it’s important to understand revolving credit. Revolving credit is a type or credit that does not have a fixed number of payments. Some examples are credit cards and home equity lines of credit. You are given a credit limit—the maximum amount you can spend. Then, you can choose to pay the full amount you owe (aka—balance) of the account each month or just make a minimum payment and “revolve” the remaining balance to the next month.

Now that you know what revolving credit is… let’s talk about why it’s important. Right after payment history, amounts owed is the biggest factor in determining your credit score. If you have maxed out all of your available credit cards and lines of credit, it can appear to lenders you are overextended.

People with the best credit scores typically have a low credit utilization ratio. Your credit utilization ratio is the amount of revolving credit you use compared to what is available to you. First, be sure all of your accounts are current. After that, start applying extra cash to pay down your revolving credit, which will improve your ratio and your score.

Pro-tip: calculate your credit utilization ratio by adding up all of your balances on revolving accounts, including credit cards. Then, add up the limits on each account. Divide your balance by the limit to find out your ratio.

For example—if you owe $5,000 on your credit cards and revolving accounts and your limit is $20,000, your credit utilization ratio is 25%.

Shoot to keep your credit utilization ratio under 50%. The lower, the better!


  1. Use small secured loans or credit cards.

When taking on new debt, you always have to weigh the risk against the reward. If you apply for a small loan or credit card, your credit will need to be pulled. As you learned in the “How is Your Credit Score Calculated?” blog, credit inquiries can impact your credit score. You also need to be sure you are able to make the payment on the new loan or credit card each month.

If you’re okay with a new inquiry and able to pay it, a small loan or credit card can help you improve your credit score as you pay it consistently.

Pro-tip: If you have money in Savings or a Certificate of Deposit, a Share Secured Loan is a great solution. The money you have on deposit is used as collateral, the pledge for the security of your loan repayment; it’s put on hold until you pay the loan back. The rate is 2% above what you are earning on the deposit, with a minimum rate of 4%.

There’s no quick fix to an 800+ credit score, but applying these tactics can help you improve your credit score. We also recommend requesting a free credit report from each of the credit bureaus each year to be sure there are no inaccuracies on your report.

Want to talk about your credit with an ēCO employee? Stop by any ēCO Credit Union branch for a free credit review*.

*Credit inquiries can impact your credit score.


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