My Credit Score Is the Highest It's Ever Been. 3 Moves I Made to Get It There

Keeping on top of your credit score is a basic personal finance move that can do you a world of good. Knowing approximately where your score falls means you can target credit cards and loans that you're more likely to be approved for, and if you notice a significant drop, you can get to the root of the problem.

I recently signed into one of my credit card accounts that offers free FICO® Score monitoring, and decided to check in and see where I stand. (I'm officially house hunting, and having a solid credit score ahead of proceeding with a mortgage will save me money.) I was pleasantly surprised to learn that my FICO® Score is 830 -- the highest it's ever been. Here's how I made this happen, and what you should focus on to boost yours, too.

1. Avoiding late payments

This is perhaps the best ongoing move you can make to get and keep your credit score shiny and polished. I haven't been late on a payment to a creditor (or on any bill, for that matter) in years. After going through a short sale on my first home (which I shouldn't have bought), my credit score was the lowest it's ever been. At that point, I recommitted to making all my payments on time, every month -- and I credit this move to keeping my credit score over 700, even when I still owed a lot on credit cards.

Payment history is the most significant piece of your FICO® Score, accounting for 35% of it. This makes sense, if you think about it -- creditors want to know whether you'll pay them back if they lend you money. If you've got a solid track record of doing so, you'll be rewarded with a higher credit score.

2. Keeping credit accounts open

It takes a lot for me to close a credit account. I actually closed my oldest active one last year, but this was after I attempted to negotiate with the credit card company to have the annual fee waived -- or downgrade the card to one without a fee. This came after I asked the company to raise the limit on the card (which was pathetically low).

After repeated refusals of my request, I decided it was best to just cancel the card. I felt OK doing so because I had another account that is almost as old, but that card has no annual fee and a credit limit five times higher. Plus, my score was over 800 by this point.

Keeping an old credit card open is a good way to show creditors a long history of responsible credit management. But if you've got a card you don't use that charges an annual fee, and your score is already pretty solid, closing the account won't devastate your credit score.

3. Paying off debt

I started working a side hustle in 2022 and used my earnings (less taxes) to get entirely out of debt, as a first step toward getting ready to buy a house this year. Doing so added 100 points to my credit score. This was a drastic move to be sure, but even paying off some of your existing debt can do good things for your credit score.

Credit utilization is the second most significant factor in a FICO® Score, representing 30% of it. Having too much debt relative to the credit you've been extended signals to lenders that you may be overextended and living beyond your means. It's best to keep your credit utilization ratio under 30% of your available credit (easy to remember, right? 30% of your score, keep below 30% usage). So if you've got a total credit limit of $10,000 across a few credit cards, aim to owe less than $3,000 total at any given time.

How does your credit score stack up?

According to research from The Motley Fool Ascent, the average American credit score is 714. This is a respectable number, and firmly in the "good" range for FICO® Scores. If your own credit score is already here, you've probably exercised caution with debt and made a lot of on-time payments. Creditors will likely reward you with lower rates on loans, but perhaps not the best rates available.

That said, if you're sitting around 700 and can make some of the same moves as I have, such as paying down debt and maintaining old credit accounts, you could see marked improvement. Bumping your FICO® Score to 740 will put you in the "very good" range -- and getting it above 800 takes you to "exceptional." As a result, you'll see a real difference in how much you're charged to borrow money -- and you can worry less about whether your application for a credit card, personal loan, or mortgage will be approved.

Personally, I'm happy that I was able to raise my own credit score to this level, as it's made the process of applying for mortgage pre-approval a lot less stressful. What can a higher credit score do for you? I recommend going all in on improving it to find out.