3. Aggressively Pay Balances
About 30% of your FICO score is based on your amounts owed.1 That portion of the score considers two things: The total you owe and the portion of your available credit that is used. Paying down balances takes action on both.
A key best practice for building credit is to go beyond just making the minimum payment. It’s better to pay as much as you can, as often as you can. If raising your credit score is your top priority, you may wish to consider a second job or side gigs to give you more income. The faster you can get to zero balances the better.
But if you pay for everything with a credit card and get close to, or hit, your limit before paying off the full card balance each month – as people who use rewards cards sometimes do – consider paying twice a month instead of once. Otherwise, your credit report may consistently show you at your credit limit, which impacts your score.