I Have an Almost 800 Credit Score. Here's How I Did It

Your credit score is a snapshot of how you manage credit, like whether you pay your bills on time. This three-digit number may not seem like a big deal on a regular basis, but it can significantly impact your ability to get a car loan or mortgage. I found out how important it was when I went through the home-buying process. 

Five years ago, I started restoring my credit while my wife and I were saving to buy a house. Like all potential homebuyers, we were hoping for a low interest rate on our mortgage, a factor that your credit score plays a big role in determining. My wife's credit was in the 800s, which is considered exceptional. But mine was stuck in the mid-600s from years of late student loan payments and credit card mistakes. 

I didn't want my credit score to hurt our future, especially when we were working so hard to move. So I did some research and learned how I could improve it. It took a few years and a lot of dedication, but I eventually increased my credit score by 130 points. Here's how I did it. 

1. I learned the basics and set a goal

I knew my credit score could be improved, but I wasn't sure of the best way to get started. So I learned how your credit score is calculated and what this number actually means.

Your credit score is based on the following five criteria: 

• 35%: Your payment history
• 30%: Amounts owed or debt you have
• 15%: The length of your credit history
• 10%: Any new credit you have
• 10%: The mix of your credit accounts

You actually have several credit scores that vary based on different credit bureaus. There are three main credit bureaus in the US -- Experian, TransUnion and Equifax -- each with slightly different criteria for reporting payments, new debt and inquiries. To make it a little more complicated, there are also different credit scoring models. The two primary ones are FICO and VantageScore. Most lenders use FICO, but VantageScore is becoming more popular.

For example, FICO organizes its credit scores into five ranges:

• Exceptional: 800 - 850
• Very good: 740 - 799
• Good: 670 - 739
• Fair: 580 - 669
• Poor: 300 - 579

If your score falls into the fair or poor ranges, banks might be reluctant to lend money to you. If they do, you likely will receive a higher interest rate, which will cost you more over the lifetime of your loan.

My credit score was 659, which fell into the "fair" range. Although it wasn't the lowest band, I knew lenders might still consider me a risky borrower. My goal was to at least reach the "good" range in time to buy a house, which seemed possible to do quickly since I was so close.

You can get a free copy of your credit report each week from all three credit bureaus at AnnualCreditReport.com. You can check in on your score with each credit bureau. Some credit cards let you view your credit score and profile. You can also use a credit monitoring service to keep tabs on your credit.

Experian

Take control of your credit score with insights from Experian, CNET's editor's choice pick for best credit monitoring service. Check out CNET's review of Experian.

Details

CNET's pick for best credit monitoring service

See at Experian

2. I prioritized paying my bills on time

Late payments wrecked my credit score for years. This wasn't shocking once I learned that your payment history impacts 35% of your credit score.

To get on the right track of on-time payments and improve my credit, I created a budget to analyze my spending habits and prioritized paying my bills before spending on nonessentials. I set up automatic payments to avoid late payments. You could also set calendar reminders to notify you when a bill's due date is coming up. 

My score significantly improved after a few months of on-time student loan, car loan and credit card payments. 

3. I paid off my car and student loans

How much debt you carry impacts 30% of your credit score.Before we had our mortgage, the two biggest debts I carried were my student loans and my car loan. To grow my score, I created an aggressive plan to pay off my loans early. I did this by increasing my income and taking on multiple side hustles temporarily.

You may not be able to pay your balances in full right away and that's OK. Aiming to pay slightly more than the minimum can help you chip away at the outstanding balance faster. And each month that you make an on-time payment helps establish good credit usage habits that can also help your score. 

4. I treated my credit card like a debit card

Another trick for increasing your credit score is to pay off any revolving accounts, like credit cards, in full after you use them. That means if I charged $400 to my credit card, I paid $400 off by the due date. It's simple once you get the hang of it, and it can keep you out of debt. 

I didn't do this perfectly. There were months when I wasn't able to pay off my whole balance. In these cases, I aimed to at least pay a large amount or half the amount. Then I'd budget to pay it off over the next month or two. 

Aiming to pay more than the minimum each month will help raise your score by keeping your total amounts and credit utilization low, which means using a small percentage of the credit you have access to. 

Boosting your credit score takes time

It didn't take me long to reach the "good" credit score range since my score was a few points shy when I started. But it took nearly five years to raise my 659 credit score to 789. There's usually not always a fast-track to improve your score. You just have to follow the same methodical steps every month.

Even then, the road to raising your credit score can be a bumpy one. Other factors can impact your progress, like a hard inquiry after applying to rent an apartment. It's normal for your score to fluctuate slightly from month to month, so don't panic every time you see a small dip. 

As long as you keep up with your payments, don't spend more than you have and regularly check in on your progress, you'll be well on your way to reaching a near-perfect credit score.

Experian

Take control of your credit score with insights from Experian, CNET's editor's choice pick for best credit monitoring service. Check out CNET's review of Experian.

Details

CNET's pick for best credit monitoring service

See at Experian