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Between managing everyday spending, paying off debt, and planning for the future, raising your credit score may not be very high on your list of priorities. You may even be wondering if it’s worth the hassle, as it can take months or even years to attain a high score, depending on your current score.

But if you want to qualify for the best credit cards and access top-tier financial tools, your credit score matters. Here’s what you need to know.

A high credit score future-proofs your finances

Credit scores typically range from 300 up to 850. The average FICO® Score is 715, while the average VantageScore is 702. A “good” FICO® Score starts at 670, and that figure is 661 for VantageScores.

So most Americans are already in good shape here. At this level, creditors and lenders tend to see you as a creditworthy individual.

In general, the higher your score, the better the rate you’ll get on car, home, and personal loans. You’ll also qualify for credit cards with better sign-up bonuses and balance transfer offers.

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Even if you don’t need access to credit right now, taking the time to build a high score can be invaluable in the future. After all, you never know when you’ll need access to cash to get by in hard times. Plus, it can put you in a better position when you’re ready to take bigger steps, such as buying a home.

There are also times when a high credit score can be useful, even if you aren’t borrowing money. For example, if you’re a renter, you should note that most landlords will look for a score of at least 650 to qualify. But in a competitive rental market, such as Los Angeles or New York City, a higher score can be what you need to stand out and land your next place to live.

How credit scores work

Most of the top lenders use a FICO® Score to determine if you qualify for a loan. So tracking that score is a great way to start out on your credit score journey. For context, here’s how FICO calculates scores:

• Payment history: 35%
• Amounts owed: 30%
• Length of credit history: 15%
• New credit: 10%
• Credit mix: 10%

How to raise your credit score

It’s important to understand that raising your score doesn’t have to be about attaining a perfect 850 score. Rather, it’s about getting your finances in shape. With that in mind, here are a few methods you can use to raise your FICO® Score.

• Sign up for autopay. Keeping up with your various bills is an excellent way to increase your score. Setting up automatic payments can ensure that human error doesn’t negatively impact you.
• Pay down revolving debt. This is often the hardest part of raising your score, but it’s a vital part of accomplishing your goal. Tools like balance transfer cards and personal loans can be helpful here.
• Ask for credit limit increases. If you already have credit cards open, increasing your limits can help decrease your credit utilization ratio, boosting your score.
• Keep old accounts open. It can be tempting to cancel old credit cards, especially if you’ve had a history of accumulating credit card debt. But that can hurt your credit score by lowering the average age of your credit, so if possible, keep old accounts open and charge a small expense every few months to avoid having them canceled.

Taking steps to improve your score may seem relatively insignificant if you don’t need access to credit right now. But regardless of your current situation, credit scores are vital to your financial health and can help you borrow money at a lower interest rate in the future. So it’s well worth making the effort to boost your credit score.

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