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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 credit history. 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 credit 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.

Keep track of your credit balances

Stay on top of how much you’ve borrowed against your available credit and aim to stay well below your credit limit. Keeping track of your spending will help you avoid using the entire credit limit, exceeding your credit limit, or missing payments.

One great way to manage your balances is to use online banking to view your monthly credit card statements. You can also set up text or email alerts to help you monitor your spending, track purchases, and more.


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

    Manage your debt-to-income ratio

    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 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.


    You can find our monthly payment calculators at

    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


    It’s a good idea to keep your balance on revolving lines under 30% of your limit.

    Monitor your credit reports

    Monitor your credit score and reports at least once a year with all three national credit bureau agencies: Equifax, Experian, and TransUnion to ensure they’re accurate. You’ll be able to catch any errors or fraud and correct them before they impact your credit history or credit score.

    Get a free annual credit report


    Consider ordering a credit report every 4 months from a different agency to review your credit history throughout the year. Requesting your free annual reports won’t affect your credit score.

    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 make access to credit easier and more affordable.

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

    Wells Fargo FICO Credit Score access


    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.

    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.