Step 3: Pay Down Your Debt

Remember that the second most heavily weighted factor in credit scoring is how much of your available credit you’re actually using. The lower your balances compared to your credit limits, the better.

The score gauges how much of your limit you use on each card or other revolving line of credit, as well as how much of your combined credit limits you’re using on all your cards. The score also factors in any progress you’re making on paying down installment accounts such as auto loans and mortgages.

Paying down your debt over time is a way to show consistent, responsible credit-handling behavior and will boost your score.

What does that mean in practice? Read on.

You Need to Reduce What You Owe Rather Than Just Moving Your Balances Around