Credit scores say a lot about financial health and habits, as they indicate to prospective lenders how much of a financial risk a person is when requesting a loan for a big-ticket item. Arvest offers seven tips to help individuals improve their scores and their chances to score the best terms possible.

Ad that says "Earn interest while saving with an Arvest money market account"

When it comes to mortgages, for example, an important step in the home buying process is ensuring the buyer has a good credit history. Having a good credit score can mean the difference between being denied or approved for a loan to buy a house. It can also help the buyer get a lower interest rate on a mortgage.

Improving a credit score significantly will take some time, but it can be done. Here are some steps to take now to begin that process:

  1. Request a credit report and make sure it is correct. Credit reports are designed to help banks and other institutions make lending decisions. It illustrates a person’s credit performance, and it needs to be accurate in order to apply for loans – such as a mortgage loan. The Fair Credit Reporting Act gives consumers access to free annual credit reports from the three major credit reporting agencies, but they must go through the Federal Trade Commission’s website at ​to receive it.
  2. Pay bills on time. Payment history tends to be a significant factor in determining a credit score. According to , payment history makes up 35 percent of a FICO credit score. The longer bills are paid on time, the better the credit score. If a credit report indicates that a consumer paid bills late, had an account referred to collections or declared bankruptcy, those actions could negatively affect the credit score. Avoid missing payments by setting as many bills as possible to automatic bill pay.
  3. Keep balances low on credit cards. Many scoring systems evaluate the amount of debt a person carries, compared to their credit limits. If the amount owed is close to the credit limit, it’s likely to have a negative effect on the score. Maintaining high balances can hurt credit scores, regardless of whether bills are paid in full each month.
  4. Open new credit accounts only as needed. Keep this in mind the next time a retailer offers 10 percent off by opening a new account. Applying for too many new accounts could have a negative effect on a credit score. Although it’s generally considered a plus to have established credit accounts, too many credit card accounts may have negative effects. When needing a new line of credit, don’t jump at the first appealing offer; compare rates and fees offered through mail solicitation, on the internet or at a local bank.
  5. Don’t close old, paid off accounts. According to FICO, the age of your accounts is one factor that affects your credit score – the longer your credit history, the better. Maintaining debt can be good for credit health — if it’s managed responsibly. And some of the biggest factors in credit scores, like credit card utilization rates and the average age of credit accounts, could take a hit with closing old accounts.
  6. Build a strong credit age. Generally, scoring systems track the length of credit a person has developed during the years. A good average age of credit history would be five years and up. An insufficient credit history may affect credit scores, but factors like timely payments and low balances can help offset this issue.
  7. Talk to a credit counselor. Using legitimate credit counseling can help manage debt and won’t hurt a credit score. For more information on debt management, contact the National Foundation for Consumer Credit (

By establishing smart habits, your credit score can become a powerful tool for when it’s time to buy a home or make other big purchases. Learn more about credit by visiting our education center.