Clark Howard How to Build Your Credit Score

Clark Howard is a renowned financial expert who has dedicated his career to helping individuals and families achieve financial security. One aspect of personal finance that Clark often addresses is the importance of building a good credit score. In this article, we will explore Clark Howard’s tips and advice on how to build your credit score, as well as address some frequently asked questions on the topic.

Building a good credit score is crucial for many reasons. It can determine whether you are approved for a loan, the interest rates you receive, and even your ability to rent an apartment or secure employment. Therefore, following Clark Howard’s guidance on this matter can significantly impact your financial future.

1. Start by understanding the basics:
Before diving into the specifics of building your credit score, it’s essential to understand what a credit score is and how it is calculated. A credit score is a three-digit number that represents your creditworthiness. It is calculated based on various factors, including payment history, credit utilization, length of credit history, types of credit, and new credit applications.

2. Establish a credit history:
If you are new to credit or have a limited credit history, Clark suggests starting by opening a secured credit card or becoming an authorized user on someone else’s credit card. Secured credit cards require a security deposit, which becomes your credit limit. By making small purchases and paying them off in full each month, you can start building a positive credit history.

3. Pay your bills on time:
One of the most critical factors in building a good credit score is paying your bills on time. Late payments can have a significant negative impact on your credit score. Clark emphasizes the importance of setting up reminders, automatic payments, or using online banking tools to ensure all bills are paid promptly.

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4. Keep credit utilization low:
Credit utilization refers to the percentage of your available credit that you are using. Clark advises keeping your credit utilization below 30% to maintain a good credit score. For example, if you have a credit limit of $1,000, you should aim to keep your balance below $300.

5. Avoid closing old accounts:
Closing old credit accounts can negatively affect your credit score. Clark advises keeping these accounts open, even if you are not using them regularly. The length of your credit history plays a role in determining your credit score, so keeping older accounts open can be beneficial.

6. Diversify your credit:
Having a mix of different types of credit can positively impact your credit score. Clark recommends having a combination of credit cards, loans, and other forms of credit to demonstrate your ability to manage different types of debt responsibly.

7. Monitor your credit report:
Regularly monitoring your credit report is crucial to ensure its accuracy and identify any potential issues. Clark suggests obtaining a free copy of your credit report from each of the three major credit reporting agencies (Equifax, Experian, and TransUnion) once a year. Checking your report allows you to dispute any errors or fraudulent activities promptly.

8. Be patient and persistent:
Building a good credit score takes time and consistency. Clark emphasizes that it’s a marathon, not a sprint. By practicing good credit habits consistently over time, you can steadily improve your credit score.


Q: How long does it take to build a good credit score?
A: Building a good credit score is not an overnight process. It typically takes several months or even years of responsible credit usage to establish a solid credit history and improve your score.

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Q: Will applying for multiple credit cards hurt my credit score?
A: Applying for multiple credit cards within a short period can have a temporary negative impact on your credit score. Each application triggers a hard inquiry, which slightly lowers your score. However, the impact is usually minimal and fades over time.

Q: Can I build credit without a credit card?
A: While having a credit card is one of the most common ways to build credit, it is not the only option. Other forms of credit, such as loans or lines of credit, can also contribute to building a good credit score.

Q: How often should I check my credit report?
A: Clark recommends checking your credit report from each of the three major credit reporting agencies once a year. However, if you suspect any fraudulent activity or need to closely monitor your credit, you may consider checking it more frequently.

In conclusion, building a good credit score is a crucial step towards achieving financial security. By following Clark Howard’s tips and advice, such as establishing a credit history, paying bills on time, keeping credit utilization low, and monitoring your credit report, you can take control of your credit and pave the way for a brighter financial future.