Our top picks of timely offers from our partners

More details
American Express® Gold Card
Learn More
Terms Apply
60,000 point welcome offer - most points ever offered for this card
Chase Sapphire Preferred®
Learn More
Terms Apply
60,000 bonus points – worth up to $750 in travel through Chase Ultimate Rewards®
Blue Cash Preferred® Card
Learn More
Terms Apply
$300 welcome offer (expires 12/10/2020), and up to 6% cash back at U.S. supermarkets
IdentityForce®
Learn More
Terms Apply
For a limited time, get 25% off UltraSecure+Credit and 2 months free on all annual plans.
Citi® Double Cash Card
Learn More
Terms Apply
Earn up to 2% cash back: 1% when you buy, 1% when you pay the bill
CNBC Select may receive an affiliate commission when you click on the links for products from our partners. Click here to read our full advertiser disclosure.
Latest

The average FICO credit score hit a record-high 711 this summer—here's how to raise yours to meet it

CNBC Select breaks down how you can reach the average FICO credit score of 711.

Getty Images

The average FICO credit score hit a new high this past July. For the first time, the average FICO Score reached 711 — up from 708 in April and 706 a year prior, according to Fair Isaac Corporation, the data analytics company behind the score.

The report of a steady increase in consumers' credit scores comes at an interesting time as millions of Americans were struggling to pay their bills amid the economic fallout from the coronavirus pandemic this summer. It is likely that the government's financial assistance, including stimulus checks and enhanced unemployment benefits, played a big factor in helping consumers stay afloat.

Lenders' forbearance and deferment programs on mortgages, student loans and car payments also freed up borrowers to pay their bills and make a dent in their credit card debt debt. In fact, the Federal Reserve Bank of New York released a report in early August that found a historic drop in credit card debt recorded in the second quarter of this year.

Decreasing your credit card balances is just one way to boost your credit score. If your credit score is lower than the average 711, there are a few things you should focus on in order to improve yours.

Below, CNBC Select breaks down the top factors to consider when you want to increase your credit score and how to keep track of your progress.

What to consider if you want to increase your credit score

When it comes to your 3-digit credit score, certain actions influence that number more than others. Credit active consumers should be aware of what the FICO credit scoring model looks at when calculating their scores.

Here are the five key factors and how much weight they each have.

  1. Payment history (35%): Whether you've paid past credit accounts on time
  2. Amounts owed (30%): The total amount of credit and loans you're using compared to your total credit limit, also known as your utilization rate
  3. Length of credit history (15%): The length of time you've had credit
  4. New credit (10%): How often you apply for and open new accounts
  5. Credit mix (10%): The variety of credit products you have, including credit cards, installment loans, finance company accounts, mortgage loans and so on

With "payment history" and "amounts owed" ranking as the top two most important factors, focusing on just these two alone make up 65% of your FICO Score and can have a big impact over time.

Begin by making an effort to pay your bills on time every month. This is the most important action you can take to start improving your credit. If you have trouble remembering the different due dates, set up automatic payment so the money comes out of your account on the same day every month and you don't make the costly mistake of paying late.

With credit card bills, it's especially crucial that you pay them in full so you don't carry a revolving balance month to month and accrue high interest charges. As your balance increases, you also eat away at your credit limit. How much available credit you use, or your "amounts owed," is reflected in your credit utilization rate. The goal is to maintain a utilization rate below 10%. The higher your utilization, the worse for your credit score. Keeping low balances and high credit limits helps for a low utilization.

How to keep track of your progress

As you work on improving your credit score, just as important is tracking your progress. While you can check your credit score for free a variety of different ways, signing up for a credit monitoring service that does the tracking for you and alerts you of any changes can be exceptionally helpful.

If you don't mind paying a monthly fee, FICO® Advanced is the best for the most accurate credit score reading. Used in over 90% of U.S. lending decisions, the FICO Score is the most widely used scoring model.

All three plans offered (Basic, Advanced and Premier) grant you access to 28 versions of your FICO Score, including scores for credit cards, mortgages and auto loans. Plus, you'll receive $1 million identity theft insurance and 24/7 access to U.S.-based identity theft experts who can help restore your identity if your information is compromised.

FICO® Basic, Advanced and Premier

FICO® Basic, Advanced and Premier
Information about FICO® Basic, Advanced and Premier plans have been collected independently by CNBC and has not been reviewed or provided by the company prior to publication.
  • Cost

    $19.95 to $39.95 per month

  • Credit bureaus monitored

    Experian for Basic plan or Experian, Equifax and TransUnion for Advanced and Premier plans

  • Credit scoring model used

    FICO

  • Dark web scan

    Yes, for Advanced and Premier plans

  • Identity insurance

    Yes, up to $1 million

Terms apply.

If you don't want to fork over a fee for credit monitoring, there are other solid services available at no cost. CreditWise® from Capital One and Experian free credit monitoring are two that ranked on CNBC Select's list of the best credit monitoring services. CreditWise uses the VantageScore credit scoring model, while Experian uses the FICO model.

CreditWise® from Capital One

CreditWise® from Capital One
Information about CreditWise has been collected independently by CNBC and has not been reviewed or provided by the company prior to publication.
  • Cost

    Free

  • Credit bureaus monitored

    TransUnion and Experian

  • Credit scoring model used

    VantageScore

  • Dark web scan

    Yes

  • Identity insurance

    No

Terms apply.

Experian Free Credit Monitoring

Experian Free Credit Monitoring
On Experian's secure site
  • Cost

    Free

  • Credit bureaus monitored

    Experian

  • Credit scoring model used

    FICO

  • Dark web scan

    Yes, one-time only

  • Identity insurance

    No

Terms apply.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.