How to clear your credit card

FICO scores vary significantly across the country with those in Minnesota having the best average score at 713. While those in Mississippi and Louisiana are averaging the lowest at 652.

If you fall on the low end of the credit score scale, then you’ll want to work on boosting your score before applying for a loan.

Learn how to clear your credit with these tips so that you can raise your FICO score and get the loan terms you want.

How to Clear Your Credit

The first step in clearing your credit score is to check your score and understand how they are calculated. Your FICO score will be in a range from 300 to 850. The lower you are on this scale, the worse your score.


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To determine your score, an algorithm takes into account various factors and weighs them against each other. These are the five factors that go into determining your score.

  1. Amounts owed
  2. New credit
  3. Payment history
  4. Credit mix
  5. Length of credit history

Each of these factors accounts for a certain percentage of your score. Payment history and amount owed count the most at 35% and 30% respectively.

New credit and credit mix account for 10% of your score. Then your length of credit history accounts for 15%.

Pay Your Bills on Time

Now that you understand how your FICO score is determined, it should make sense that the most important thing you can do is pay your bills on time. Lenders want to know that if they lend you money, you will pay them back.

If you struggle with this, try using tools. You can schedule online payments. Or you could schedule calendar reminders.

Use Experian Boost

Create an account on Experian’s website and use their boost feature. It is completely free, and all you need to do is link your bank account.


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Experian will then scan your bank accounts for possible payments that can boost your credit score. These include things like cell phone and utility payments.

You can then watch in real-time as your score rises from the data Experian pulls from your bank account.

Pay off Your Credit Cards

If you carry high balances on your credit cards, then it is good to start focusing on paying them down. This way, you reduce your credit utilization percentage.

The goal is to keep your credit utilization below 30%. To determine what your utilization is currently, add up your available credit. Then total your credit card balances.

The ratio of these two numbers will tell you what your current percentage is.

Leave Your Unused Cards Open

It can be tempting to close old credit cards that you no longer use. However, this can actually hurt your credit. Instead, put the card in a drawer.

Closing the card will lower your available credit, which means your credit utilization ratio will go up. It will also reduce the number of accounts you have. Then if you’ve had the card for a long time, it will lower the average age of your accounts.

The only time closing your unused card is smart is when they cost you money. This would in the form of annual fees.

Improve Your Score and Get the Loan

Now that you know how to clear your credit, you are ready to tackle that low FICO score. Follow these steps, and in time, you will begin to see your FICO score start to rise.

If you can’t wait to improve your score before getting your loan, then you should consider installment loans that don’t require a credit check.