5 Levers That Can Move Your Credit Score This Summer

When you sit down for the car loan or the apartment application, a number you haven’t seen can decide your rate before you even say a word. Most advice treats that number like a mystery. It isn't. Five factors decide your credit score, and here's how to nudge each one before fall.

Pay every bill on time.

Payment history is the single biggest piece of your score. One late payment can sit on your report for years, and it does more damage than almost anything else on this list. Put every fixed bill on autopay for at least the minimum, then set a calendar reminder to cover the rest. A clean payment streak is the single most powerful thing you can build this summer. If you do slip, call the lender before the bill reaches 30 days past due, since many will hold off reporting when you bring the account current right away.

Bring your card balances below 30 percent.

Credit utilization ratio, the portion of your credit limit you're using, is the second biggest factor and the fastest way to improve your credit. Carrying a balance near your limit drags your score down even when you pay on time. Let's say you've got a $5,000 limit with $2,000 on it. That's 40 percent, high enough to cost you points.  Pay it down to $1,400 and you're under 30 percent. If a big loan is on next year's list, this is the lever to move first. You can also ask for a credit-limit increase you don't touch, which lowers your ratio without changing what you spend.

Keep your oldest card open.

The length of your credit history helps your score, so that first card you barely use is still working for you. Closing it shortens your average account age and can erase years of on-time payment history overnight. Put a small recurring charge on a Visa® Rewards credit card, like a streaming subscription, set it to autopay, and let it age. The goal is to keep the card and it’s history active.

Space out new applications.

Every credit application triggers a hard inquiry, and several in a short window signals risk to lenders. If you're rate-shopping for an auto loan or mortgage, do all of it inside a two-week window so it counts as a single inquiry instead of several. Outside of that, give new credit a few months between asks. Each inquiry trims a few points and lingers for a year, so the store card that saves you ten dollars at the register can cost you a far better rate on the loan that actually matters.

Let your credit mix build on its own.

A blend of credit types, a card here, an auto loan there, helps a little, but it's the smallest lever on this list. Don't take on a loan you don't need just to round out the mix. Put your energy into the top two factors, payment history and credit utilization, and the mix sorts itself out over time. If you're just starting to build, a small credit-builder loan or a secured card adds a second type safely, but only reach for one when it's something you'd use anyway.

A stronger score this summer earns you better terms on whatever fall brings, from a new vehicle to a first home on the Front Range. If you want a read on where you stand, call (800) 444-4816 or stop by one of our branches to speak with a Member Advocate at Credit Union of Colorado about the accounts and tools that help you build credit on purpose.