If there's one thing Americans are good at, it's racking up debt. So it's pretty encouraging to learn that the average credit score in the country has reached an all-time high of 700. But while 700 is certainly a respectable credit score, it still leaves room for improvement.

Here's a breakdown of how credit scores are typically viewed by lenders, along with the percentage of Americans who fall into each category:

Credit Score


Percentage of Consumers





Very good












A score of 700 is several steps below "excellent," which is where you really want your credit to be. The better your credit score, the greater your chances of not only getting approved for a loan or line of credit, but also of borrowing money at the most favorable rate available.

A man in a suit holds up a card reading "credit score," with checkboxes for "excellent," "good," "fair," and "poor."


Here's an example. Imagine you're applying for a 30-year fixed mortgage in the amount of $300,000. If your credit is excellent, you'll currently be eligible for a 3.449% APR, which translates into a monthly payment of $1,339. With a score of just 700, however, you'll be eligible for a rate of 3.671%, which comes with an associated payment of $1,376. That $37 difference may not seem like a huge deal, but over the course of 360 payments, you'll spend an extra $13,320 on your mortgage by virtue of not having had better credit when you applied.

The good news is that consumers have several options for improving their credit scores quickly. If you'd rather that your credit score surpass that of the average American's, here what you need to do.

1. Pay your bills on time (and, ideally, in full)

Your payment history is the single most important factor in determining your credit score, and it speaks to your ability to pay your bills on time. Therefore, one of the easiest ways to boost your credit is to start paying each bill you get by its respective deadline. Some people can't always cover their full credit card balance, but if that's the case, then be sure to at least make your minimum payment before its due date. Though you'll accrue interest charges on your remaining balance, as long as you come up with that minimum payment, you'll be doing your credit score a favor.

Keep in mind that many service providers, like cable or utility companies, offer an automatic bill pay option which takes forgetfulness out of the equation. If you have a tendency to be late with bills not because you're short on cash, but because it slips your mind, signing up for these services could help improve your payment history, and, in turn, your overall credit.

2. Pay off some existing debt

Second to payment history, credit utilization is the next most significant factor in calculating a credit score. Credit utilization is the extent to which you're using your available credit, and if you borrow more than 30% of your total line of credit at any given point in time, it's going to bring down your score. That's why it's helpful to pay off existing debt. Doing so will automatically reduce your credit utilization ratio, which will work wonders for your score. (Incidentally, paying off debt sooner will also help you avoid further interest charges, which will help your finances on a whole.)

3. Open new accounts sparingly

Though your new credit accounts don't carry the same weight as your payment history and credit utilization when establishing your credit score, opening too many at the same time could constitute a major setback. On the other hand, if you're careful about only applying for one new account or credit card at a time, it'll help your score by sending the message that you're a responsible borrower.

4. Review your credit report once a year (times three)

It's estimated that 20% of credit reports contain errors, and if you identify a glaring one on yours, getting it resolved could give your credit score an immediate boost. That's why it pays to be vigilant about reviewing your credit report -- and not everyone is. In fact, as of earlier this year, 37% of Americans hadn't checked their credit reports in at least 12 months, while 16% admitted to never having checked them at all. You're entitled to a free copy of your credit report from all three major bureaus each year (though at present, you might experience delays if you try to obtain one from Equifax), so get your hands on that information and make sure it's correct.

A strong credit score can contribute to a healthier financial picture on a hole. Whether your score is above, below, or at 700, it pays to keep working on that number to keep your borrowing options open.

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