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From the Experts at

How Do I Improve My Credit Score Without Debt?

Advertiser Disclosure by Lucy Lazarony

How Do I Improve My Credit Score Without Debt?

The best way to improve a credit score is by making on-time payments.

Payment history accounts for 35% of a credit score, but there is no need to dig yourself into debt to improve your credit score.

Qualifying for a low-limit credit card is all you need.  Make a few small charges each month and pay your account in full each and every month.

Keeping charges below 10% of your credit card’s limit is good for your credit score as well. So if you have a card with a $500 limit, keeping your monthly charges below $50 is also a good, credit-building strategy.

If you are unable to qualify for an unsecured credit card because you are new to credit or have made credit mistakes in the past, apply for a secured card instead.

With a secured card, you make a small deposit, typically a couple of hundred dollars, with a credit card issuer. And your card’s credit line is your deposit minus any fees charged by the card issuer.

Make sure you choose a secured card that is reported to each of the three major credit reporting agencies — Equifax, Experian and TransUnion. Then, make steady on-time payments with a secured card and keep charges below 10% of your credit line. And after a year of on-time payments, ask your issuer for an unsecured credit card.

You can keep track of your credit-building with’s free credit tools. You’ll receive two free credit scores and a customized plan to build your credit. And because your data is updated each month, you will be able to track your progress.

Remember: The key is building up a good solid payment record, not acquiring debt. Only charge what you can pay off each month, and maximize your credit-building efforts by following the 10% rule.

Then, pay your bills on time and watch your credit score climb.

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  • Dan

    4 years ago I bought a house and at that time my credit score was something like 750. 3 years ago I paid off and cancelled my credit cards, then I paid off my house. I have never borrowed any money since paying off the house, I currently have no debt of any kind. How would my credit score look today.

    • Credit Experts

      You could check it yourself to see. Here’s how to monitor your credit score for free. It is also possible you have become a “credit ghost” without a score. You can read more about that, plus what to do, here:
      Have You Become a Credit Ghost?

    • mjf

      Look at it, maybe freeze your credit can freeze it..good to keep it above 700 even though your home and cars and depts are all paid for..times and circumstances in life can change rapid fast and its good for emergencys to always have that security to fall back on having good credit..

  • Ketan Patel

    Hi Guys,
    I met a Credit Counsellor, and looking at my credit report, she suggested me to open a Loan account in a Credit Union.
    I have opened a Loan account of $1000, and have deposited $1100 in the savings account, and have setup an autopay for each month.
    My credit card limit is $1000 on a secured credit card on my name and $1500 as a authorized user, I pay every 14 days, and keep my balances really low, and before due date i pay the rest. I dont have any other active debt, other than 3 charged off accounts, that were closed 3 years ago. I pay on time, zero balances, still my score is very slowing growing.
    Question: The bank where i opened this loan account, the lady suggested that, I can open one more loan account, this should double the score that is being reported at the end of the month. Does it work? Having two different loan accounts from same bank, will bump scoring every month? Same Creditor?
    Also, this is a Loan, so my credit balance/limit will be $2000 now when some is pulling my credit, whereas i have a credit limit of $2400 from both the card. Will this start lowering the score, since my debt will grow?
    Please do provide your expert suggestions, i am in process of rebuilding my credit.

    • Gerri Detweiler

      A second loan isn’t necessarily going to “double” the score. It may help, since you will have two current, paid on time credit references (rather than just one) but it will take time for that new reference to help your scores. (The fact that it is the same creditor shouldn’t matter if they are reported as separate loans).

      I am not sure what you mean by your debt/limit. Are you talking about the utilization or debt usage ratio? That will be calculated on each account separately as well as with both combined.

      • Ketan Patel

        Thanks Gerri for your guidance. Debt to Limit – I was asking about utilization. I owe one credit card with a limit of $1000 and another one I am an authorized user with a limit of $1500. Both the cards are paid before due date in full, but still utilization is around 17%, I guess when I make some charges after due date and before CC reports on my credit file, some amount is reported by them.

        Now second loan, if I take for $1000 more, does this affect the Credit Usage.
        As of now on Experian I am seeing my Credit Debt is $266, total credit is $2000 (increased credit line of $500 hasn’t been updated yet), but its show CREDIT USAGE 14%. Does this will go up, since next month, I will have $2500 in credit limit plus now I will have 2 loan accounts of $2000 total, each of $1000.



        • Gerri Detweiler

          17% or 14% isn’t terrible by any means. I am having a bit of trouble following your comment, but your new credit limit will increase the aggregate credit limits and if the balance is small can improve your debt usage overall, though scores often look at it individually (per account) as well. Perhaps this article will help: Tips for Improving Your Credit: Your Amount of Debt

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  • Meet Our Expert

    lucy_lazarony GravatarLucy Lazarony is a freelance personal finance writer. Her articles have been featured on Bankrate, MoneyRates, MSN Money, and The National Endowment for Financial Education. Prior to freelancing, she worked as a staff writer for Bankrate for seven years. She earned a bachelor's degree in journalism from the University of Florida and spent a summer as an international intern at Richmond, The American International University in London. She lives in South Florida.
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