How to Build and Maintain Good Credit

A credit score reflects your overall relationship with credit. It is one of the key factors lenders use to decide whether to approve loans and determine the interest rate that will be paid. Lower interest rates on your loans means lower monthly payments, and more income you'll have for your other financial goals, including long-term saving and retirement planning.

What is a good credit score, and where can I find it?

Credit scores can range from 300 to 850, and a score between 670 and 739 is generally considered good. Many banks and credit unions now provide your credit score for free as part of your existing online and mobile banking services. There are simple ways to strengthen your credit score with the same metrics that most banks and mortgage lenders rely on.

How credit scores change as you get older

Building good credit takes time. The younger you are, the less likely you are to have a long credit history — one of the key factors in your score. Here is how credit typically evolves over time:

1. In your 20s: You are just getting started. Credit scores may be lower due to limited history, fewer accounts and shorter track records of on-time payments. This is the time to build good habits like paying on time and keeping balances low. A good credit score in your 20s is mid-600s or above.
2. In your 30s: Your credit profile becomes more established. With a longer history, a mix of credit types (like credit cards, auto loans or mortgages) and consistent payments, scores often improve significantly.
3. In your 40s and beyond: Credit scores tend to peak. By this stage, you will likely have a long credit history, strong payment record and well-managed debt — key ingredients for excellent credit.

What factors impact my credit score?

The factors that impact your credit score include:

• Payment history: Payment history is the single largest factor in your credit score, making up 35 percent, according to the Federal Deposit Insurance Corporation (FDIC).
• Credit utilization: The amount of credit you’re using, also known as your credit utilization, makes up about 30 percent of your score.
• Length of credit history: The length of your credit history accounts for about 15 percent of your score.
• New credit inquiries: The rest of your credit score — approximately 20 percent — rates your debt mix, the number of accounts you have and whether you have recently applied for a loan or credit card.

How do I improve my credit score?

1. Pay on time. By consistently making your loan, bill and credit card payments on time, you’ll build a solid foundation for a healthier credit score. Even one overdue payment can have the opposite effect, so setting reminders or automatic payments can help protect your score.
2. Reduce current debt and borrow new credit wisely. Less outstanding debt, especially on credit cards, generally helps keep your score higher. However, having no credit history at all can work against you. Lenders want to see responsible borrowing. Take out credit for major, long-term purchases like a home, car or education, and keep credit card balances to amounts you can comfortably pay in full each month.
3. Stick with your lenders. It pays to maintain your credit relationships. Closing older, unused cards may shorten that history and lower your score. Your credit profile benefits from long standing accounts and a consistent pattern of responsible use.
4. Limit credit applications. Submitting too many applications in a brief period can signal financial strain to lenders. Apply for new credit sparingly and only when necessary.

Good credit isn’t built overnight, but through steady, intentional financial habits. By paying bills on time, managing debt carefully, keeping long-term accounts open and avoiding unnecessary credit applications, you can strengthen your credit score and open the door to better rates and financial opportunities. Strong credit gives you flexibility, stability and more control over your financial future.

Learn more: Credit Scores and Reports