5 Ways to Build Your Credit this Month

April 21, 2025

The task of improving your credit score can be incredibly challenging. Whether you’re looking to maintain your score or repair damaged credit, there is no shortage of advice. But how do you decide which areas to prioritize? Based on factual information on what makes up your credit score, here are 5 ways you can start building your credit score this month.

1. Pay Your Bills On Time, Every Time

First and foremost, it is essential for improving your credit score to be paying your bills on time. On time payments is the leading factor, making up 35% of your score. At CASFCU, we know that keeping track of your upcoming payments is difficult to manage. That’s why we offer payroll deduction. Setting up automatic loan payments takes the stress off of you to remember every single deadline and meet them with perfection.

Sometimes even with advanced scheduling, life happens, and you may miss a payment. A timely reaction to your mistake may lessen the impact on your credit score. If you miss a payment, the damage might not be done to your credit score before you have the chance to catch up. Completing your late payment less than 30 days after the due date may save you from a report by the credit bureaus. In order to avoid long term financial damage up to seven years, make catching up on your missed payments a top priority.

2. Increase Your Spending Limit

Since credit utilization accounts for 30% of your credit score, we recommend focusing on that area second only to making on-time payments.

Credit Utilization refers to the amount of your available credit that you’re using. For example, maxing out your credit cards can lead to a negative impact on your score. Ideally, you should aim to use less than 30% of your available credit. If keeping utilization low isn’t feasible, consider requesting an increase of your credit limit. Wise management of your credit balance can make a big difference in your score.

3. Consolidate Your Debt

If you’re not able to do either of the above with your current lines of credit, consolidating your debt might be the right choice for you. Combining your active debt into one personal loan can possibly decrease your monthly payments, allowing you to simplify your finances and increase your available balance—which can improve your utilization ratio.

CASFCU signature loans come with affordable fixed payments that can make paying down your debt more manageable and efficient. If you’re struggling with multiple balances, our personal loans with competitive interest rates are a great way to potentially boost your credit.

4. Limit New Credit Applications

It is a commonly held belief that checking your score can hurt it, but that’s not entirely true. There is an important distinction between two different types of credit checks. While checking your own score through a credit monitoring service has no effect, applying for new credit is a hard inquiry and may cause you to see a temporary dip in your score.

If you’ve applied for a new credit card or a loan in the past six months, it’s optimal to hold off on new inquiries if possible. FICO found that those with six or more inquiries on their credit reports are eight times more likely to declare bankruptcy than those with none. However, because inquiries only make up 10% of your credit score, if you are managing your credit responsibly otherwise, it may be reasonable for you to wait only three months before your next inquiry rather than six. These guidelines depend on your financial situation, and it’s always smart to seek guidance and assess your goals before making the decision to apply for credit.

5. Diversify Your Credit Portfolio

The remaining 25% of your credit score comes from your credit mix and credit history. Your management of different credit types over time is important to lenders.

Credit history makes up 15% of your score, taking into account the length of your active and inactive credit accounts. This is why closing old accounts after you have paid off debt may not be beneficial. Your credit mix accounts for the final 10% of your score. A diverse credit portfolio- including credit cards, auto loans, mortgages, and more can possibly improve your score if they are handled well. A diverse credit history demonstrates stability and responsibility to future creditors.

The most important tip to focus on depends on your unique financial situation. We are here to help you manage your payments and credit mix in a way that helps you improve your score. Let us know how we can help today by calling (423) 624-9094 or visiting us at our branch.