Do these things to build better credit and enjoy the perks of lower loan rates

By Jean Chatzky* Being denied a loan for a home or a car — or anything — can feel like a punch in the gut. But no matter how you got to the place where you don’t qualify for the best APR rates, or how long your credit has been less than ideal, all is not lost.

There are strategies you can take to begin building your credit back up. Yes, it may require some time and lots of patience on your part, but you won’t regret the effort.

Here are a few suggestions to bump up your credit starting now:

Get your credit report and dig in

Knowledge really is power. You are entitled to a free credit report and score any time you like through SavvyMoney. Pulling your own credit information — which is like a report card for how you handle money — won’t impact your score. It’s also a good idea to request one report from a different bureau (Experian, Equifax and TransUnion) every four months so you can make sure there are no errors showing up on individual reports. Get these for free at

If you see anything on a report that’s not correct, report it. About 20% of all credit reports have mistakes, so you need to really scour the document to ensure everything is ship shape. A mistake could mean a lower score even if you did nothing wrong. As the global pandemic led to job losses and other financial hardships, the Federal Trade Commission has noted an increase in credit report errors reported by consumers.

Automate to avoid late fees (and a lower credit score)

Your credit score is largely based on your payment history, counting for about 40%. Scores range from 300 to 850, the higher the better. Here’s the thing: Even one late payment on a credit card can lower your score by as much as 100 points. That’s huge. And that’s why it’s so important to pay your bills on time, or even early, every single due date.

One way to do this is to use online banking and set up automatic payments. We’ve said it before but it is worth repeating. Make it easy on yourself. You can do this by setting up electronic calendar reminders on your smart phone, tablet or laptop, to help nudge you to pay your bills a day or so early. If you are old school, put a big red dot on the paper calendar in your kitchen or office, tape a note to your bathroom mirror or find some other clever way to remember. You can thank me later!

Pay down debt then stay low

Lenders don’t want to see sky-high balances on your credit cards. That means making an effort to pay down balances if you’re carrying them — and then refrain from maxing out your cards if you can help it. Owing more than 30% of your credit limit can be a red flag to those in the money-lending business. You should instead aim to use between 10% and 30% of the total credit you have.

Use it or lose it

If you don’t use a credit card in six months or longer, your credit card issuer could cancel the account and that, in turn, could ding your credit score. If it was the card you held for the longest period of time, that’s a double whammy, because the longer your relationship with your lender, the better it is for your score. To keep an unused card current, make a small purchase once a month then immediately pay the bill.

Consider a secured credit card

If you get turned down for a traditional credit card because of a low credit score or no credit history, you can try opening a secured credit card. This type of card allows you to give the issuer (a credit union or a bank) a certain amount of money up front, which becomes your credit limit. Over time, perhaps 18-24 months of good behavior, many secured cards will transfer to a regular credit card.

*This guest article is from the “Your Money Blog” in Mid Oregon’s Digital Banking Credit Savvy resource. It is made possible by SavvyMoney. “Five Ways to Boost your Credit Score Starting Now” by Jean Chatzky with Casandra Andrews was published in June 2021.