6 easy ways to raise your credit score

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Establishing a good credit score is a vital piece of your financial future, giving you access to the best credit cards, a lower interest rate on personal loans and more. It can even come into play when you apply for a job or rent an apartment.

It's important to raise your credit score so you receive the best rates and can qualify for more credit cards. If you're building credit, secured cards, such as the Discover it® Secured Credit Card, are often your best option. Once you work your way up to good or excellent credit, you may qualify for cards with generous welcome offers and robust rewards programs, such as the American Express® Gold Card and the Chase Sapphire Reserve® (see rates and fees), two of CNBC Select's top-rated rewards cards. Thankfully, there are some easy and proactive steps you can take to improve your credit score.

Read on for CNBC Select's six easy tips to help you raise your credit score.

Paying your bills on time is the most important thing you can do to help raise your score. FICO and VantageScore, which are two of the main credit card scoring models, both view payment history as the most influential factor when determining a person's credit score. For lenders, a person's ability to keep up with their credit card payments indicates that they are capable of taking out a loan and paying it back.

But your credit score isn't just impacted by your credit card bills. You need to pay all your bills on time. That includes all your utilities, student loan debt and any medical bills you might have.

If you struggle to remember to pay your bills each month (so many different due dates, so little time), there's an easy fix: autopay. If you're not sure you'll be able to pay your bill in full, you can set it so you just pay the minimum. And the same goes with your utilities: Most major providers will let you set up autopay that withdraws automatically each month from your checking or savings account (or charges your credit card). In the case of student loan companies, some give you a discount on your interest rate if you set up autopay.

If you don't want to use autopay, another easy option is setting up a payment reminder. Many banks and card issuers will let you schedule reminders through their websites, including sending you email reminders or push notifications (or both). You can also set up Google or Outlook calendar invites or make a note of the due date on a physical calendar. It doesn't really matter what notification system you use so long as you pay on time.

The sooner you start paying on time, the sooner your score will begin to improve. And just as a bit of motivation, older credit penalties, such as late payments, matter less as time passes. So start now and stay consistent.

FICO and VantageScore look at the number of credit inquiries, such as applications for new financial products or requests for credit limit increases, as well as the number of new account openings. Making these kinds of inquiries frequently dings your credit, so only apply for what you really need in order to avoid damaging your score. Plus, even if you have a good credit score, some issuers will automatically deny you if you've recently opened too many accounts. For example, you can't be approved for most Chase cards if you've opened five or more personal credit cards (from any card issuer) within the past 24 months.

If you want a new card, but you're not sure you'll qualify, you can submit a pre-qualification form online. You can submit as many pre-qualification forms as you want, as they won't impact your credit score.

If you're responsible about paying your utility and cell phone bills on time, sign up for *Experian Boost®. It's a free service that allows you to link on-time payments to your Experian credit report that might not otherwise be recorded.

Visit Experian to read more and register. By signing up, you will receive a free credit report and FICO® score instantly.

It's smart to look over your credit reports from each of the three major credit bureaus: Experian, Equifax and TransUnion. You can proactively monitor your credit score and receive three free credit reports (one from each bureau) annually at annualcreditreport.com.

Be sure to check for errors on your credit reports that could be hurting your score. While it may seem unlikely that your reports would be flawed, 26% of participants in a study by the Federal Trade Commission (FTC) found at least one error on their reports that could make them appear riskier to lenders.

Common mistakes, according to My FICO, occur when a person applies for credit cards under different names, if a clerical error is made when information is typed from a hand-written application or if an ex-spouse's information remains on a person's report. If you spot an error, you should then gather any supporting evidence and dispute the mistake either online or by phone with the respective bureau that issued the incorrect report.

Your credit utilization ratio (CUR) is the amount of credit you're using compared to the total credit you have available to you. The average American has a credit limit of $21,017 on 4 cards and a $5,910 balance in 2022, according to Experian. That results in a CUR of about 28%. Experts typically recommend keeping your CUR below 30% to get approved for most loans and credit cards. A ratio of below 10% will help get you the best rates.

One easy way to improve your CUR is to ask for an increase on your credit card limit. The key is leaving that additional credit untouched. If you ring up more charges, you're just raising your ratio again.

FICO and VantageScore credit scores both range from 300 to 850, but they have different classifications. A credit score of 661 is considered good by VantageScore, for example, but not by FICO. Here's how the two companies classify credit.

FICO

• Poor: 300 to 579
• Fair: 580 to 669
• Good: 670 to 739
• Very good: 740 to 799
• Excellent: 800 to 850

VantageScore

• Very poor: 300 to 499
• Poor: 500 to 600
• Fair: 601 to 660
• Good: 661 to 780
• Excellent: 781 to 850

While you may think you know your credit score, the two companies have multiple versions of their scores, depending on what the information is being used for — some scoring models are used by auto loan servicers, some by mortgage lenders and others by credit card issuers.

Base FICO Scores, such as FICO 8, forecast your chance of defaulting on a credit product, such as a mortgage, credit card or student loan. Industry-specific FICO scores, such as FICO Auto Score 8, provide lenders with a detailed risk assessment tailored to the specific type of credit you're applying for.

Even if your credit score falls within the "good" range, there is no guarantee you'll be approved for a financial product that requires good credit. During the application process, lenders consider many other factors besides your credit score, including income and monthly housing payments.

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*Results will vary. Not all payments are boost-eligible.  Some users may not receive an improved score or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost™. Learn more.

For rates and fees of the Discover it® Secured Credit Card, click here.