Improving your credit score is more than just a number—it's about creating financial opportunities that can save you thousands of dollars in interest and open doors to better financial products. In 2025, with interest rates still elevated and lending standards remaining stringent, your credit score has a more significant impact on your financial well-being than ever before.
The fastest legitimate way to improve your score depends on what's currently holding it back, but for most clients, reducing credit utilization (the percentage of available credit you're using) delivers the quickest results. Aim to keep your credit utilization below 30%, and ideally below 10%. You can achieve this by paying down existing balances or increasing your credit limits through requests to your creditors.
While credit scores themselves don't directly impact your tax situation, the strategies you use to improve your score can have significant tax implications. For example, paying down high-interest credit card debt may leave you with more disposable income that can be better allocated or even invested. Additionally, taking out a mortgage with a lower interest rate due to a better credit score could lead to tax deductions on mortgage interest.
No, in most cases you should keep old credit cards open, even if you rarely use them. Older credit accounts positively affect your credit history length, which is a significant factor in many scoring models. Closing old accounts can lower your average account age and negatively affect your credit score. If you are concerned about inactivity, consider using the cards for small purchases periodically to keep them active.
There's no single "right" number of credit cards that maximizes your score, but data suggests that consumers with excellent scores typically have 3-5 credit cards. The key is not the number of cards but how well you manage them. Keep your utilization rates low and ensure timely payments to achieve the best results.
Being added as an authorized user on someone else's credit card can significantly boost your score if that card has a good payment history and low utilization. This is because the credit history of this account gets added to your credit report. It's a helpful way to build credit, especially for those with limited credit history. However, be cautious—if the primary cardholder misses payments or has high utilization, it could negatively impact your score.
Paying off collections can improve your credit score, although this improvement can depend on how the creditors report the payment. Generally, a paid collection is viewed more favorably than an unpaid one. Once paid, ensure the creditor updates your credit report to reflect the payment as this can significantly affect your score.
Credit repair services can assist in disputing inaccuracies on your credit report and improving your overall credit health. However, you can achieve many of these same results on your own without the added expense. That said, if you choose to utilize a credit repair service, ensure they are reputable and transparent about their processes.
Checking your own credit score is considered a "soft inquiry" and does not affect your credit score. However, when a lender checks your score as part of a credit application, it is deemed a "hard inquiry," which can have a minor, short-term impact on your credit report. It's essential to monitor your credit regularly without fear of diminishing your score.