How to Get a Good Credit Score and Maintain It [The Ultimate Guide]

By Todd Kunsman

Financial Independence

Published on

Updated on

By now, you probably know that credit scores exist and that these scores have some significance to your life. Yet, the history behind the scoring system, why it really matters, and and how to get a good credit score may still be a bit confusing.

Maintaining your credit score and understanding it is incredibly important to your personal finances, whether you think so or not. It affects more than you might think and can make a difference in how much you pay in interest and if you get approved for an apartment or mortgage.

This article will cover quite a bit on credit scores, but hopefully this can serve as your ultimate reference guide if you ever need reminders or help.

Below is what will be covered, so feel free to jump to a desired section:

I. Short History on Credit Scores

The way your credit score is calculated, actually varies from the various scoring companies. This tends to make it all a bit confusing, but there are really only two scoring methods you should care about.

The first is VantageScore, which is a scoring system by the most popular and well-known credit bureaus, including Experian, Equifax, and TransUnion. These are the ones you typically see when you apply for credit or if you use a credit report monitoring website (more on that below).

Another popular credit scoring system is your FICO score, which a majority of creditors use as well if you apply for credit. This was started in the late 1980s, but has maintained popularity ever since.

If you are looking to learn more about these scoring systems, you can visit their websites below for more information:

Credit scores are in a range from 300-850, where the higher your score the better. Many creditors or lenders pull a few of these, because your score can actually vary. For example, your TransUnion score can be higher or lower than Equifax.

Strange right?

Well, each credit bureau assigns its own score because the information they use to include or exclude may be slightly different.

Also, when something is calculated (like a debt payment), it may take longer to be reported on one credit bureau from another. Usually your scores will not be wildly different, but could be off by a handful of points.

II. How to Check Your Credit Scores

Not too long ago, requesting your credit report to see the score would either cost money and/or could drop points from your score. Now thanks to the digital age and technology, we have better ways to monitor our credit scores for free that does not affect the points.

For a few years I chose not to do this. But as I learned more about finances, I realized how important monitoring my credit scores was.

I currently use two platforms, Credit Karma and Credit Sesame.

Credit Karma is probably the most recognizable name and offers credit reporting, recommended credit cards, and other loan options based on your scores. This was the first one I signed up for when I got started.

The one I recently signed up for (and is also free), is Credit Sesame. Besides the in-depth look at your credit history and loan recommendations, they have one really awesome differentiating feature. Credit Sesame offers an additional layer of protection with $50,000 identity theft insurance free to all members. Sign up for free here.

Extra: Besides seeing “soft inquiries” on your credit report from one of the above platforms (which do not count against your score), there are also “hard inquiries.” Those are when lenders pull your report when you apply for credit. It will slightly lower your score, but will be removed over time.

III. Why Your Credit Score Matters

So the big question you may ask is, why does my credit score even matter? Essentially, lenders and creditors use these scores to determine and assess the risk of extending credit or loans to you.

And that makes sense, because they need to ensure that they will recoup any money you borrow and ensure you don’t cause headaches for them.

So by having a poor or low credit score, you may run into challenges with your finances and other areas of your life. Here are a few examples:

  • You may be charged higher interest on loans
  • Can be rejected on credit card applications
  • Be denied getting an apartment or mortgage

So this means your credit scores (typically your FICO score) and history can be pulled and reviewed by:

  • Mortgage Companies
  • Banks
  • Landlords
  • Insurance Companies

The above is a bit scary to think about and is why establishing credit early and maintaining a good credit score is so important. Plus, a lower credit score can cost you money over a period of time because you have to pay higher interest on a loan.

IV. How to Maintain A Good Credit Score

Before I get into some tips on how to maintain a good credit score and report, we should talk about how scores are calculated a bit further. Knowing these items are also the key to keeping your score as high as possible.

As mentioned earlier in this post, credit scores range from 300-850. This is the same overall scoring model used across all credit bureaus, even though each may vary from each other when you look up your report.  

  • 800-850 – exceptional
  • 740-799 – very good
  • 670-739 – good
  • 580-669 – fair
  • 300-579 – very poor

Your credit score is calculated, according to Investopedia, into five main categories:

Your payment history – That you are paying loans, debts, and bills on time and do not have any late payment marks. This is something I perfected since having a credit card at 18 and served me incredibly well with my report once I had student loans, a car payment, and utilities.

Current level of indebtedness – This is simply the amount you owe back. But, just because you might have a bit of extended credit or debt, does not mean you will have a lower score. For example, having all your credit cards maxed out will cause a red flag. But debt that is not all maxed out, even if the number is higher than the first example, doesn’t mean your score will be docked.

Types of credit used – If you want the highest level of credit scores, your credit needs to have a variation. Meaning having a credit card, retail credit card, vehicle loan, student loans, etc. You don’t need ten different items, but some variation helps on your report helps the scoring.

I’ve only ever had one credit card (now two), but I also had student loans and a car loan. That variation along with the above two sections were enough to keep my variation mixed. Not recommending to get loans, but just an example of a factor to your score.

Length of credit history – The longer your credit history, the better your score will be. This also depends on the other areas here, but this is also an important factor to your score.

New credit accounts you have – This refers to how often you are opening new lines of credit or applying for loans. If you are applying to a lot in a short period of time, it indicates potential risk.

That is also the importance of order to how your score is calculated, with a higher weighted percentage on the first two items.

One thing that is sort of irritating with credit score calculations, is if you pay off your debt early, you can actually lose points. By rewarding yourself in paying something off sooner to get out of debt, it can harm your score.  

It doesn’t mean you’ll drop like 100 points, but you can lose 10-25+ points. Even though I have a long and good credit history, I paid my car off 1.5 years early and my score dropped almost 30 points! However, these points will recover. I got them all back in a few weeks.

V. Tips to Fixing and Protecting Your Credit

While you don’t want to have a low or poor credit score, it is pretty common and happens often to people. The good news is, you can take steps to fix your credit and can have dramatic score increases in relatively decent time.

However, the other part of this is to also protect your credit scores. With the digital advances comes more threats from others trying to open credit in your name and run up damage to your report. Just like there are tips to fix your credit, I have some insights on how to protect yourself as well.

Fixing Your Credit

If you have a poor credit score or none at all (it’s possible to have zero if you have not had any credit or your credit is under six months old), it will be difficult to get any line of credit. But, there are ways to fix your credit score and start to establish your credit history.

The below tips can help, but if you need additional assistance or help I recommend creating an account with CreditRepair and consulting with their experts. This is a paid service, but it is well worth the help and the amount of money you’ll save in the future from high interest payments.

Note: Ensure you know what your score is and look at any inquiries on your report. It helps you understand where you stand and how to track your progress. I recommend signing up for Credit Sesame, it’s free to use and won’t hurt your score.

Step 1: Look for Any Errors or Issues

A quick way to potentially increase your score, is remove any errors, issues, or other weird inaccuracies that tarnish your score. There may be false accounts opened, payments marked as late that were not, and other things.

Get a copy of your full credit report for free at They are authorized by the federal government to provide consumers with a copy of their credit report at no cost.

If you notice anything is inaccurate, you can file disputes with the credit bureaus to get them removed and take care of inaccuracies.

Step 2: Pay Overdue Bills and Pay On Time Moving Forward

Your payment history is one of the biggest factors to a great score. So if you have any debt in collections or bills not paid, get those taken care of immediately. Many of the companies looking for their money are willing to work with you to get a payment plan in place. Just making an effort goes a long way!

From there, you need to be on top of your payments and be on time with everything. This was a huge reason for my upper 700’s/low 800’s credit score. I have 10+ years of bill payments at a 100% paid on time with nothing in collections.

Set up some automatic payments to never miss a bill or set up recurring reminders for yourself in your phone, calendar, or other apps.

Extra: You can set up payment reminders for credit cards and loans with Personal Capital. Your accounts will need to be linked to Personal Capital, but it’s free to use and helps you stay on track. Plus, there are other great features of the application you can use.

Step 3: Apply for New Credit Accounts Only as Needed

Every time you apply for a new credit card or line of credit, the inquiry will ding your report a few points. Not a big deal from time to time when you need to apply for something.

But doing a whole bunch of applications can harm your score. These are called “hard inquiries” and typically will remain on your credit report for up to two years.

It’s okay to have 1-2 cards at once, but only if you are going to be responsible and not rack up tons of debt, further harming your score.

Step 4: Don’t Close Unused Credit Cards

Just as applying for too many credit cards, closing unused cards can also negatively impact your score.

If your current cards do not have annual fees, they have not been hacked, and you don’t feel tempted to use them for overspending, then keep them open. Just put them somewhere safe, but out of your reach if you’d be tempted to use them.

Step 5: Lower Your Credit Utilization

You might be wondering what this exactly means, but it’s more fancy sounding that it is. When you have a credit card you usually have a max limit of what you can spend. If your credit limit is $5,000 and you use $1,000 of that, your credit utilization rate is 20%.

On average, lenders prefer to see you under 30%, as it signals you aren’t overspending or maxing out your credit every month.


There is no quick fix for low credit scores and varies on how long you can see improvements. It depends on just how many blemishes are on your report, how quickly you act, and that you stay on top of your payments and credit.

In order to start establishing some credit, many banks can work with you by opening a card that is attached to your bank account. It would act more like a debit card, so you have to have a minimum balance in your account, but can help establish your credit.

There are also a few credit card companies that are for those with low scores. The interest rates may be high or there may also be an annual fee, but these can help you get started. You can always upgrade later as your score improves and get access to better credit cards.

With your free Credit Sesame account, you’ll get recommendations for credit cards you’d have the best chance being approved for based on your score.

Protecting Your Credit

It seems like every other week you read about a data breach, where your personal info like emails, addresses, names, and even social security numbers are leaked. It’s a real problem that needs a major solution (besides holding these companies to massive fines and accountability).

There are a few options to ensure your credit reports and scores are more secure. Even if you have not been hacked or your info has not been leaked, I’d recommend taking some steps to protect yourself.

Put a Fraud Alert On Your Credit Reports:

This is completely free to do and takes a few minutes to complete, but can protect you from someone trying to open credit in your name. When you place an alert on one credit bureau they are required to let the other two know.

This then ensures for one year, if any line of credit or loan is applied for, the lender has to verify it is you directly. I did this last year when my data was breached, but had my girlfriend and parents do it recently too even though they were not breached.

Freeze Your Credit Reports:

If you were a victim of identity theft recently or might be currently battling that, you may want to considering putting a “freeze” on your credit reports at the three main bureaus mentioned above.

Unlike the fraud alert that each will be notified from one form fill out, you have to contact each bureau to get this done. But this locks anyone from opening an account, including you (you can put a temporary lift or unfreeze at any time).

It also won’t protect you in situations where criminals already have access to your accounts (like if your bank login credentials were previously stolen via hacking).

If someone is opening credit cards in your name or trying to, you should also report it to the Federal Trade Commission’s identity theft website. It’s easy and free to use, but they help build you a custom plan of how to recover and protect yourself.

I’ve done this myself with a recent incident, which helped protect my credit and identity better. They also give action steps, letter templates, and anything you may need based on your situation.

Final Thoughts

There you have it, an ultimate guide to all things credit scores. It is a lot of information, but hopefully this helped you understand the credit scoring system much better, tips to fixing your credit, maintaining a good credit score, and protecting yourself as well.

If you find fixing your credit is still a challenge, again I highly recommend reaching out to the experts at CreditRepair, who can assist you further. This is a paid service, but their expert knowledge and money they’ll save you in the future is worth it. Learn more and some reviews at their website here.