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Good Credit Habits

Get smarter about your credit and debt

Good credit helps with more than borrowing; it can factor into everything from renting an apartment to getting a cell phone. Lenders, landlords, and utility providers may all review your credit report when making decisions about your eligibility and deciding what to charge for loans. Establishing good credit habits is essential so that you can build and improve your credit history and credit score.

Pay your bills on time

Prioritize and schedule your monthly payments, making sure to pay at least the minimum payment on time every month on all your accounts. Try to pay more than what’s due whenever possible. This helps to pay down debt faster, save on interest expense and may improve your credit score. Your payment history makes up approximately 35% of your FICO® Score, so making timely payments is an important way to improve your credit score.

You may benefit from having your credit card bill paid automatically on or before the due date using automatic payments. Or, check into online bill pay to conveniently pay your bills online.


Consider setting up alerts for when your payments are due.

Avoid maxing out credit accounts

Keep track of your credit transactions, especially your credit card activity. Check that you’re not exceeding or maxing out your credit lines since this can reflect negatively on your credit score. If you’re a Wells Fargo customer, you can set up different types of alerts (such as email and text) and other services to remember upcoming payments so that you’re managing your credit usage responsibly.

Wells Fargo Online — Alerts


Keeping your credit utilization rate below 30% may help you maximize your credit score.

Manage your debt-to-income ratio

Use our online debt-to-income calculator to help you compare how much you spend on your monthly recurring debts (like loan payments, rent payments, etc.) against your income. Lenders use your debt-to-income (DTI) ratio to assess your ability to pay back any new debt. Keeping your obligations much lower than your income helps ensure a lower DTI ratio, which may make it easier for you to qualify for new credit.

It’s helpful to create a budget to track and plan your spending.


Use our online calculator to check your debt-to-income ratio.

Contribute to an emergency fund

In addition to a regular contribution to your savings account, it’s a good idea to set money aside every month for an emergency fund. This helps ensure that you’ll be able to meet your credit obligations and unexpected expenses, if your situation changes.

One way to simplify saving for your emergency fund is to set up recurring transfers into a savings account through your bank.

Wells Fargo Online — Transfers


While it can be challenging to save when you have other financial obligations, you can learn how to pay yourself first, and better prepare for the unexpected.

Practice making payments before taking on new debt

Find out from a lender how much your estimated monthly payments would be for a new loan, then transfer this amount into a separate savings account for 3 – 4 months. If you can comfortably handle this cost, you can probably afford these payments. Plus, at the end of the practice period, you’ll have money in your savings that you can use to make a down payment, lower the amount you borrow, or put into an emergency fund.  

Monitor your credit reports

Monitor your credit score monthly and review your credit reports at least once a year with all three national credit bureau agencies: Equifax®, Experian®, and TransUnion® to ensure they’re accurate. This will help you catch any errors or fraud, and help you correct them on your credit history or credit score.

Get an annual credit report


Consider ordering a credit report every 4 months from a different agency to review your credit history throughout the year.

Know your credit score

Once you have determined that your credit reports are error-free, you can turn your attention to your FICO® Scores. Having a higher FICO® Score can help make access to credit easier and more affordable.

Eligible Wells Fargo customers can now easily access their FICO® Score through their Wells Fargo Online® account.

View your credit score with Credit Close-Up


There are many credit score services available to consumers. FICO® Scores are used by 90% of lenders, and are not the same as a VantageScore.

Think before closing accounts

Credit scores take into account your credit utilization ratio, therefore closing credit accounts may lower your available credit and could hurt your credit score in the short term. This can also impact the average age of your credit file. If you are considering closing an account to avoid the temptation of charging up a balance, then that might be the best course of action for you. Otherwise, consider keeping accounts open if they have a good payment history and a low or zero balance.


Keeping accounts active will also help you with building the length of your credit file, which makes up 15% of your FICO® Score.

Help protect yourself against fraud and identity theft

Only apply for credit with established banks and credit card companies, not through online or social media ads. Don’t pay upfront fees to apply for a credit card or loan. Be wary of companies offering to resolve your debt problems, especially for a fee.


Never provide your Social Security number, PIN or other account information to a caller unless you initiated the call or other communication.

Ready to borrow?

If you’re thinking about borrowing, now’s a good time to assess your financial situation.

What to Consider Before Borrowing

Debt-to-income (DTI) ratio

Your debt-to-income ratio is the percentage of your monthly income that goes toward paying down debts and other monthly expenses like rent.