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Article written by Laura Lopez and reprinted with permission by Cardinal Financial.

Slow and steady wins the race. If you view building good credit like a sprint, you’re going to lose. Think of it like a marathon and you’ve got a better mindset to build good credit. The fact is, building good credit is a way of life. It will change your lifestyle—and it should. If your goal is to increase your credit score, buckle in and get ready for a long ride. Here are some of the best ways to build good credit to help you get started.

The best ways to build good credit are slow but sure. Don’t rush it!


Get familiar. Do your research. You can’t build good credit if you don’t know how credit works. First, you’ll need to know your score and pull a copy of your credit report from a reliable source. The best place to get an accurate credit report? Any one of the three major credit reporting agencies: Equifax, Experian, and TransUnion.

Each credit reporting agency will calculate your credit score slightly differently because not all lenders and creditors report to all three. So, although each score varies slightly, they represent your total credit score when combined. And since each agency goes by the FICO scoring method, which uses predictive data analytics to generate the most accurate credit score, you know you’re getting the best information out there.

You should also know what your score means. Is 670 good or moderate? The answer will vary based on what scale you use, but Experian has a great guide to help you see where you may rank according to their standards.


People make mistakes—lenders and creditors are no different. If you obtain a copy of your report annually and read it over for errors, you’re in good shape. Sometimes, however, you might find that specific amounts you owed were documented wrong or your address was written incorrectly. These things happen, but they can negatively impact your credit score.

In fact, there’s a law that gives you the right to dispute such errors. The Fair Credit Reporting Act promotes the accuracy, fairness, and privacy of consumer information held by consumer reporting agencies. It says you have the right to have these errors investigated and potentially corrected. In order to do that, you’ll have to send a letter with supporting documentation to the credit reporting company and the lender. It might be a hassle, but if it improves your score, why not?


Hands down, one of the best ways to build good credit is by paying down the balance you owe. Whether that be on credit cards, student loans, or some other type of debt. Pay it down as fast as you can to bump your credit score up.

Mortgage lenders look at what’s called your debt-to-income (DTI) ratio when deciding whether to give you a home loan. The lower your DTI, the better. When your DTI is high, you’re considered to be a higher lending risk. And lenders always want to lend to someone they can safely assume will pay it back. By paying down your balance, you can lower your DTI ratio and put yourself in a better position to be eligible for a mortgage.

How low does your DTI have to be? That will depend on the mortgage lender you choose and the type of loan you’re borrowing. A simple phone conversation with your loan officer can easily help you find out.




Late payments can really hurt your credit score. That’s because payment history is a major factor in determining your credit score. Even missing one payment can negatively impact your score, so do whatever you can to make sure you don’t fall behind.

Want an easy and practical way to ensure you’re making payments on time? Use auto-pay. Obviously, you want to make sure you have the money in your account to cover every payment. But if you tend to forget to make payments, this makes it a no-brainer. Don’t think about your payments—just let auto-pay do its job!


So what if remembering to make payments is no problem for you, but it’s the “having enough money in your account at all times” that you’re having trouble with? Ah, that’s a deeper issue. For starters, you need to assess your situation and ask yourself Am I living within my means? If the answer is no (be honest), you don’t want to miss the next section. If the answer is yes, you may just need to get your finances in order and create a budget.



It has a long lasting, positive effect on your credit score if you stick with it. If sticking to a budget is hard for you, get some accountability! Ask a friend or family member to be a “budget buddy” and take on the challenge of living by a budget together. Then you can hold each other accountable and encourage each other to stay the course.


There are also so many apps and programs out there today that can help you budget. You can download one of these apps, hook it up to your bank account, and create categories to get started. Then, whenever you swipe your credit card, the purchase shows up in the app, and you can move it under the appropriate category. It’s a great way to keep track of your expenses and set financial goals.


Just because credit helps you buy things you can’t afford, doesn’t mean you should live that way. A smarter way to build good credit would be to treat your credit card like a debit card. You may rack up purchases for the month, but by the end of the month, you should pay it off so that no balance carries over into the next month.

In fact, it may be good to practice living within your means by going on an all-cash diet. This means only paying with cash or debit for a while. Then, once you’ve got the hang of responsible spending, start using your credit card the same way (but make sure you make payments on time!).


Even if you’re not using them, keep your oldest accounts open. Part of what helps your credit score is credit history. A long history of maintained accounts contributes positively to your credit score. So even if you’re not using your very first bank account anymore, don’t close it! Make sure it’s in good standing and then keep it open.



Brad Patshkowski

Preparing future home owners is paramount to our customer's success and the success of our industry. The dream of homeownership is closer than you think!