Your credit score shapes many parts of your financial life. A higher score can lead to lower interest rates, easier loan approvals, and more room to reach long-term goals.
The average Hoosier’s credit score, according to Equifax, is 704. No matter your starting point, smart habits can keep your score in a healthy range.
This credit score checklist gives you clear steps you can follow, starting today.
1. Pay Off Outstanding Debt
Debt plays a large role in your credit score. When you reduce what you owe, you lower your credit usage and show strong repayment behavior. This can play a part in an improved credit score.
To pay down debt, some people like to begin with the smallest debt. Others want to pay off the highest interest balance first. Both can lead to progress. You can become debt-free with simple planning.
It helps to make a list of all your balances and focus on one target at a time. In some cases, consolidation may put you in a better financial position. To find out if using your home equity to pay down debt might be right for you, see our debt consolidation calculator.
2. Pay Bills On Time
Payment history is the biggest part of your credit score. One late credit card or loan payment can set you back. A pattern of on-time payments can move you forward. Set up reminders or use automatic payments whenever possible. If cash is tight some months, even the minimum payment helps protect your history.
3. Call Creditors About Late Payments
If you fall behind, you can reach out to your lender or credit card company. Many creditors offer hardship programs, payment plans, or late-fee reversals. Although your lender may choose to give you a one-time late fee reversal, be sure you are not more than 30 days late on your payment, as those are required to be reported to the credit bureaus. Try to set up alternate payment arrangements, like reduced payments, before you get too far behind, if you can.
4. Negotiate With Collection Agencies
If a debt goes to collections, you can still improve the situation. Ask about a payment plan or a reduced balance. In some cases, a collector may agree to mark the debt “paid” on your report after you settle. Stay calm and ask questions. You want everything in writing before you pay. Remember, though, that even when a payment plan is set up or it shows as paid, this will stay on your credit report for 7 years, so try to avoid going to collections and negotiate directly with your lender first. In some cases, you could qualify for reduced payments if you qualify for hardship programs.
5. Check Your Credit Report for Errors
You get a free credit report from each bureau once per year. You can also check more often through some credit monitoring services.
Look for mistakes like:
-
Accounts you don’t recognize.
-
Payments marked as late when they were on time.
-
Wrong balances or limits.
Fixing errors can lead to a rapid increase in your score. You can dispute any problem directly with the bureau. Remember — payments are reported monthly, not daily, and it can take up to 60 days for a payment to be reflected on the credit reports.
6. Lower Your Credit Utilization Ratio
Your credit utilization ratio is the amount of credit you use compared to your limit. Many experts suggest keeping it under 30% on each card and overall.
You can lower this ratio when you:
-
Pay down balances.
-
Spread spending across more than one card.
-
Ask your lender for a credit limit increase.
Even a small drop in usage can help you build a good credit score over time.
7. Keep Old Accounts Open
The length of your credit history also affects your score. When you close an old account, you shorten your average credit age. If the card has no annual fee, you might want to keep it open and use it once in a while to keep it active.
8. Avoid Too Many New Credit Applications
Each new credit application leads to a “hard inquiry,” which can lower your score for a short time. When you shop for a loan, try to do it within a short window. Many credit scoring models group these into one inquiry when they happen within a focused period.
9. Mix Different Types of Credit
Lenders want to see that you can handle a blend of credit types. This may include a credit card, a car loan, or a student loan. You do not need to take on debt to improve your score. The goal is to manage what you already have in a steady way.
10. Monitor Your Credit
A regular check helps you spot trends early. You can track your progress, see how payments change your score, and catch errors. It also helps you stay focused on the big picture. You want steady improvement over time.
You can get your free reports from each credit bureau once a year through AnnualCreditReport.com. This is the only official site that provides them based on the most current federal guidelines.
#RICKatDONAYRES
