Improving an already good credit score can be a frustrating task. But not an impossible one.
I recently spoke with Rod Griffin, who is the Senior Director of Public Education and Advocacy for Experian, to get some advice for consumers who are looking to improve their credit score in 2023.
Rod is an expert on credit reports and their impact on credit scores.
I asked him a series of questions that may be featured in multiple articles on our site, but for the purposes of this story, I focused on getting tips for moving your credit score from “good” to “great.”
I also included his tips on getting your score into shape for consideration for top rates from lenders, as well as tips for you or someone you know who may need help establishing or repairing credit.
Table of Contents
- Understanding Experian’s Credit Score Tiers
- Tips for Moving Your Credit Score from Good to Great
- Tips for Getting Into the Top Tier for Lending Rates
- Tips for Those in Your Life Who Are Struggling With Credit
- Final Thoughts
Understanding Experian’s Credit Score Tiers
If you’re “plugged in” enough to be looking for ways to improve your credit score, you’re likely aware that you actually have several different credit scores.
For the purposes of this article, we’ll be focusing on the popular FICO score model that many lenders use when assessing your credit profile.
FICO grades on a 300 to 850 scale. The higher the score, the better.
Rod’s company, Experian, puts FICO scores into the following tier buckets: Poor (300-579), Fair (580-669), Good (670-739), Very Good (740-799) and Exceptional (800-850).
Tips for Moving Your Credit Score from Good to Great
Many of our readers at Clark.com find themselves among the 67% of Americans that Experian says have a FICO score considered “Good” or better.
But there’s still a large gap between the bottom of the “Good” tier (670) and a perfect credit score (850). And, as such, there may be different courses of action needed for someone with a 680 score versus someone with a 790, for example.
I first asked Rod to give some advice to people who may find themselves in the upper 700s looking to get into the 800s.
How To Reach 800 and Above
If you find yourself “stuck” in the upper 700s, you’re not alone. Roughly 25% of Americans find themselves with FICO scores in the 740 to 799 range.
Rod says time may be your greatest asset for moving into the elite world of 800+ scores.
“You’re doing the right things already,” Rod said of consumers with FICO scores in the upper 700s. “You are almost certainly making your payments on time and probably have been for a long time. You’re keeping your balances low on your credit cards relative to your credit limits and you’re not opening a lot of credit all at once. So, quite often for a person who is in that tier, it’s a matter of time and consistency.”
However, if you’re trying to expedite things, you can attempt to do so by getting more granular in your self-assessment.
And, believe it or not, that means focusing less on the actual score and more on the components that make up your score.
Rod suggested the following strategy, regardless of your actual score:
- Get access to your credit report. (Team Clark has a list of free ways to do so here.)
- Sign up to receive your credit score for free each month. (Money expert Clark Howard recommends free services Credit Karma and Credit Sesame, but you may also get it from Experian. You may also receive it from another source, like your bank or credit card issuer.)
- Focus on the risk factors … in order. Your credit score should be accompanied by some “risk factors” that describe why your score may be increasing or decreasing. Rod says the key to score improvement is likely in the details of these key factors that accompany your score each month.
“Typically you get four, maybe five, risk factors,” Rod said. “They are generally listed in the order of importance as they’re affecting the score you receive. If you use those risk factors to identify what it is in your credit history that you most need to work on, you will be able to improve your score.”
Don’t Worry So Much About This Factor
While credit risk factors that are impacting scores may differ from person to person, Rod did say there is one that people looking to go from “good to great” can mostly ignore.
This is referred to as the “fifth factor” in the industry because it is a risk factor that is always required to be listed alongside your others.
“If an inquiry affects scores at all — even a single point — we have to list that as a factor,” Rod said. “But I don’t worry about inquiries because that’s simply a record that someone has looked at your credit report. If you’re managing your credit well and have scores in the high 700s moving into the 800s, those inquiries aren’t impacting your score in any kind of meaningful way. If you have an inquiry in your report, it typically only affects scores for a matter of a couple of months and then any impact diminishes or goes away completely.”
Tips for Getting Into the Top Tier for Lending Rates
If you have a FICO score that ranges between 700 and 750, you’re likely being approved when applying for credit. But you may not be receiving the best terms and interest rates offers from a lender.
Rod says that the quickest way to improve your score to move into that “elite tier” that offers the best rates is likely going to be cleaning up your credit card situation.
“Generally, someone who is in this situation has a payment history that is really good, but they may have high credit card balances,” Rod said. “So, most often, the fastest thing you can do to improve your credit scores is to reduce your credit card debt. If you’re in the low-to-mid 700s range, look at that first. Pay down your credit card debts, reduce your overall utilization rate on your credit cards and you will likely see scores improve.”
If your credit cards are in check, Rod says you’ll want to refer to the risk factors we mentioned above to find opportunities for granular improvements.
A couple of common factors that impact scores in this range:
- Credit mix. What type of debts do you have? Generally speaking, a healthy credit mix has a blend of installment and revolving credit. Working toward that can improve your score.
- Timing your transactions. Rod says scores in this range are prone to fluctuation, so you may want to assess what you’ve done recently. Have you opened a new line of credit? That may be a temporary dip. Have you paid something off? It may take a couple of months for your score to stabilize after going down first and then potentially going up.
Tips for Those in Your Life Who Are Struggling With Credit
Most Clark.com readers have a strong credit score, but that may not be the case for everyone in your life.
I asked Rod for some tips that you can pass along to your friends or family who may be struggling to reach the “good” tier that is often required to receive approval on credit applications.
Remedy the Major Blemishes As Soon As Possible
If you’ve followed our advice from earlier in the story and pulled a credit report to gain a better understanding of why your scores may be lower than anticipated, it’s likely that you may have found a late or delinquent payments on file. Perhaps there’s even something that has gone to collections.
Rod says one of the quickest ways a score can start moving in the right direction is making sure those debts are paid in full and up-to-date on your credit report.
“Catching up on those late payments or paying off a collection account can help scores,” Rod said. “Because when you pay off a collection account, the newest scoring systems, and the most commonly used scoring systems, like FICO 8 or Vantage Score, will exclude those collections from the calculation. So, you could see a pretty rapid increase in score.”
Make Sure You’re Getting Credit for a Variety of Payments
Most people know that missing payments on rent, utilities or cell phone services can result in a ding on your credit report.
But that’s typically only a one-way street. Those companies are usually not reporting to the credit bureaus when you make on-time payments.
Rod said many people who are struggling with credit scores are actually making consistent on-time payments for things that may not be reflected in the credit scores they’re receiving. Many times they’re not even aware of it.
“Having your utility bills, your rent and even your streaming services added to your credit report can help,” Rod says.
There are some new-age tools that will help you receive “proper credit” for these payments on your FICO score.
For example, Rod’s company has a program called Experian Boost that is designed to help consumers add recurring payments that otherwise aren’t being reported to your credit report. He’s obviously a proponent of it, but we’ve put it to the test.
Team Clark’s Craig signed up for this product and gave an unbiased review of the impact it had on his personal score. Spoiler: It raised his score by 14 points during the testing period.
“Our research at Experian has shown that people who are paying their rent on time and paying their cell phone bill on time are a better risk [for creditors] than their credit history may have otherwise shown,” Rod said. “So it’s meaningful for lenders… And it’s a powerful tool that wasn’t available even just a few years ago.”
Much of what Rod told me during our interview is in line with the advice that Clark gives listeners and readers.
No matter where you’re at in your credit life, you should be seeking out your free credit report regularly, reviewing your credit score monthly and focusing on addressing risk factors as a means of improving your score.
And while striving for a super-high credit score can be fun, Rod also agreed with Clark’s stance that there’s no need to stress about your score once it crosses the threshold for the best rates available.
While Clark does want you to pay attention to your credit, he says that once you reach a certain point, it’s a waste of time to think about it too much.
“There are people who want to be at 850 [the highest possible score]. I don’t get it. You’re crazy if you obsess with an 800 or 850 credit score,” Clark says. “Your goal is from wherever you are right now, to try to move that number up. But once you get to 760, just give it a rest.”
Much like in school, an A is still an A whether you’re receiving a 97 or a 99 from the teacher.