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How To Improve Your Credit Score in 2025

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Resolutions That Pay Off: How To Improve Credit Score in the New Year A cartoon person pushes the needle on “credit score,” scale.

As you begin thinking about your New Year’s resolutions, don’t forget to set some financial goals for the upcoming year. Set a goal of improving your credit score to help ensure a bright financial future. A good credit score can help you achieve other goals, such as buying a home, renting a new apartment, or purchasing an automobile.

Understanding Credit Scores: What Is Credit?

If you don’t know much about your credit and credit score, you’re not alone! In fact, in a 2019 study, CNBC found that four out of 10 Americans had no idea how their credit score was determined. For many U.S. consumers, a credit score can feel like a black box shrouded in mystery. In this blog, we hope to clear up some of the fog surrounding credit scores. A credit score is essentially a three-digit number ranging from 300-850 that indicates your credit risk level, especially when you’re applying for a loan or financing. You may hear your credit score defined as a FICO score. This is because the Fair Isaac Corporation (FICO) created the credit score model. 

Why Do Credit Scores Matter?

For those who are new to learning about credit and credit scores, you may not understand why having a good credit score matters. The reality is that your credit score is taken into account in many different situations. Credit scores are considered when you need a home loan or mortgage, if you apply to rent an apartment, when applying for credit cards, and more. Lenders typically offer significantly better interest rates on loans to those with better credit scores.

How Are Credit Scores Determined?

You may be wondering how credit scores are determined. FICO breaks down factors influencing your score into percentages, where higher percentages mean a higher impact on your score:
  • 35% payment history. Have you paid off past debt on time (credit card bills, loans, etc.)?
  • 30% accounts owed. How much debt do you have? What percentage of your credit do you use? 
  • 15% length of credit history. How long have you had credit accounts? 
  • 10% credit mix. Do you have a variety of credit accounts? 
  • 10% new credit. Have you opened several new accounts in a short period of time?

How To Improve Credit Score Through Good Financial Habits

Woman reviewing her bills.

How To Improve Credit Score With Credit Card

If you’re a student or a younger adult, you may not have many credit accounts yet. While you don’t need a credit card to build your credit score, responsibly using a credit card can go a long way toward improving your score. When you get your first credit card, spend responsibly by paying your balance as soon as possible and only using your credit card for items you can afford. Many consumers opt to use their credit cards exclusively for necessities they can afford, like gas and groceries.

Monitor Your Loans and Credit Usage

Whether you have installment loans, a credit card, or another type of credit account, keeping track of your credit utilization is essential. Look for credit cards that allow you to view usage online, such as Landmark National Bank’s credit cards. A general rule of thumb is to keep your credit utilization below 30% of your overall limit. For example, consumers with a $10,000 credit limit should keep their balance below $3,000. To keep your credit utilization low, pay off your statement frequently. 

Make All Credit Card and Loan Payments on Time

Since payment history is a significant factor in your credit score, it’s essential to pay credit card bills, loan installments, financing accounts, and mortgage loans on time. Late payments can lower your score and stay on your credit report for months or years. If you have trouble remembering to make payments, try these strategies:
  • Use autopay when available.
  • Create a reminder on your smartphone’s calendar app to make payments.
  • Set up bill pay reminders if possible.

Review Your Credit Report Frequently and Request Corrections When Needed

Woman reviews credit report on a laptop. Your credit score is broken down in detail on your credit report, which is a summary of your credit history and usage. In short, your credit report basically determines your score. Checking your credit report frequently can help you catch potential errors made by the credit agencies that generate the reports and possibly improve your credit score. You can get a free credit report at annualcreditreport.com, a website run by the three major credit bureaus in the U.S.

Frequently Asked Questions About Credit Scores

Do Student Loans Affect Credit Score?

Yes, student loans affect your credit score. They are considered installment loans, and timely payments can help build a positive credit history. However, missed or late payments can negatively impact your score. Additionally, the amount of student loan debt can influence your credit utilization and overall creditworthiness. Managing your loans responsibly is important to maintaining or improving your credit score.

Do Medical Bills Affect Your Credit Score?

Yes, medical bills can affect your credit score if sent to collections. Unpaid bills typically don’t appear on your credit report directly, but once a medical provider turns the debt over to a collection agency, it can negatively impact your score. However, some credit scoring models weigh medical debt less heavily than other types of debt. Paying off the collections can help improve your score over time.

Build Your Credit Score for HELOC Loan and More With Landmark National Bank

If you’re ready to take the first steps toward a better credit score, let Landmark National Bank help. Check out our personal credit card options, which can be a great first step toward building credit. If you’re improving your credit score to buy a home, Landmark has home loans that can help you through the process. Start on your path toward meeting your financial goals with the support of a truly excellent bank. Locate your nearest Landmark National Bank branch to get started. At all our Kansas bank branches, you’ll find friendly banking professionals happy to help you with your banking needs. You can also find more helpful articles on personal finance, budgeting, estate planning, and more on our blog.

How Do Student Loans Affect Your Credit Score?

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How Do Student Loans Affect Your Credit Score?

A woman holding a phone that displays her credit score, in front of a latte and a laptop

Student loans are many people’s first ventures into the world of credit. Because of this, it can be confusing to navigate their impact on your financial future.

If you’re feeling lost, you’re not alone — that’s why we’ve put together this factsheet for how student loans affect your credit score.

How Is My Credit Score Calculated?

Your credit score is calculated by weighing your recent and long standing credit activity under multiple categories. There are several credit score types, but the most commonly known is the FICO score, which grades your credibility as a borrower on a scale from 300-850.

The following factors go into calculating your total credit score:

  • Payment history, 35% of your total score — A missed or late payment will hurt your payment history.
  • Credit utilization, 30% of your total score — This portion of your credit score considers the amount you owe against the total amount you can take out. A lower credit utilization ratio generally signals a borrower is not dependent on or overextending their credit.
  • Length of credit history, 15% of your total score — The longer you have a line of credit open, the stronger your credit score.
  • Recent credit activity, 10% of your total score — This indicates your current risk to lenders and will be impacted by the recent opening or closing of one or more lines of credit.
  • Credit mix, 10% of your total score — Shows a diverse use of credit rather than dependency on one form.

By creating a total score based on these factors, where 300 is considered poor and 850 is considered excellent, lenders can determine your risk and responsibility for future credit.

How do student loans affect my credit score?

Student loans are a type of installment loan, meaning you have agreed to pay back a specific amount of money during a set period. Like other loans, student loans appear on your credit report and play a role in building your credit score.

Most commonly, student loans affect your credit score by showing your extensive payment history and length of credit.

How Can Student Loans Hurt My Credit Score?

Your credit score takes a hit by being late or missing a payment. Other instances — like defaulting on your loan — can cause irreparable damage.

Additionally, if you decide to refinance or consolidate your student loans at some point, your longest line of credit will be reconsolidated into a new loan. If your student loan was your longest existing line of credit, this could impact the length of your credit history and lower your credit score accordingly.

Take Steps Toward Success with Landmark National Bank

When building your financial future, partner with a bank that has your back. At Landmark National Bank, our dedicated staff will help you find personal banking solutions that work for your goals — learn more about our services, or find a location near you and open an account today!

Will Closing My Credit Card Hurt My Credit Score?

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Will Closing My Credit Card Hurt My Credit Score?

A woman holds a credit card in one hand and a cellphone in the other.

Updated October 2025 

As useful as credit cards can be, it can also be easy to rack up a lot of debt if you’re not careful. Once you’ve paid off that debt, closing a credit card can feel liberating, but you may still wonder, “How does closing a credit card impact your credit score?” Whether you’re hoping to opt out of an annual fee or reduce your open lines of credit, here’s what to know before taking the next step.

Does closing a credit card hurt my credit score?

Closing a credit card may, at least temporarily, lower your credit score. 

Your credit score is calculated by examining multiple factors, including payment history, how much you owe, the length of your credit history, types of credit you have, and most recent credit activity. This is all done on a weighted scale and each factor affects your score in a different way.

Your recent activity is weighted as 10% of your credit score, and large changes (like closing a card) can signal risky behavior to lenders. 

Bottom line: Closing or cancelling credit cards will shift how your credit score is calculated so understanding the impact on your credit score is important.

What happens if you close a credit card?

There are several ways your credit score can be impacted by closing a credit card. Most commonly, it increases the percentage of credit used versus available credit.

For example, suppose you start with three cards with a $1,000 limit each and close two because you’ve only been using $1,000 in credit. Where you were utilizing your credit at 33%, that number now jumps to 100%. This percentage is called your credit utilization ratio.

Ultimately, creditors and lenders like to see a low credit utilization ratio because it theoretically shows you are not overusing or financially dependent on credit. Many financial advisors recommend leaving unused lines of credit open to prevent a significant change in this ratio. More available and unused credit is good for your credit score.

Closing a credit card may also change the length of your payment history. The longer your credit history, the better it is for your score, so closing a card that’s been open for a long time will significantly impact your credit history. If a card is newer, closing it will have less impact on your credit history and therefore your credit score.

Is it bad to close a credit card?

Closing or cancelling a credit card isn’t necessarily “good” or “bad.” It all depends on your goals. While it may impact your credit score, it may hold short-term and long-term benefits, such as reducing annual card fees or encouraging you to spend less and stay on track financially. 

How to close a credit card safely

If you decide that closing a credit card is right for you, there are a few steps to ensure your credit card is closed safely. 

First, pay off any remaining balance on the card, update any recurring payments using that card, and see if you have any unused rewards.

Next, either call the card issuer (listed on the back of your card) or cancel online. Finally, cut up the physical card to avoid confusion and keep your identity protected.

It’s also considered best practice to follow up with a written cancellation request so there’s a paper trail involved.

Now it’s time to check your credit score. You’ll want to know how your score has been affected for future financial decisions and to ensure the line of credit no longer appears. You can get a free credit report through services like Experian or Credit Karma. Doing a monthly credit check can help you learn how certain behaviors (closing a credit card) can affect your credit score and help you prepare for larger purchases (home, car) and avoid surprises in the future. 

Note: You don’t have to pay off your credit card balance before closing a card. You can close the card and continue paying off your debt monthly or in larger chunks. However, interest will continue on your credit card balance even though the card is closed. So make a plan to pay off your credit card as soon as possible.

How to pay off a closed credit card

After you close your credit card, you’ll want to focus on getting rid of any and all outstanding balances. Here are a few ways to pay down your debt and keep your credit score healthy. 

  • Use a method called debt snowball

    This essentially means paying off one card at a time. Start with the highest interest credit card so you can stop accruing interest, faster. Then, move onto the next card and the next until you are debt-free or carrying the level of debt comfortable to you. Throughout this process, keep up on your minimum payments for all cards to avoid fees. Paying your credit cards off in this way, allows you to focus on one goal at a time and see progress more easily. Check out our debt snowball calculator to help you tackle your credit card balance.

  • Get a personal loan

    A personal loan can be obtained from your banking partner for a low interest rate. Consolidate your credit card balances into one personal loan so you have a lower interest rate and only one payment to manage. 

  • Transfer your balance to a zero interest card

    Balance transfer cards typically carry zero interest and charge a fee for transferring your balance from other accounts. This allows you to focus on one payment for your debt and avoid the costly interest from your credit cards. Many times, zero interest cards begin charging interest after a year or 18-months so make sure you have a plan to pay off your debt within this time period. 

Pay off your debt securely

While there are many viable options for paying off your credit card debt, there are also several scams to watch out for. If a company or person asks you for money or fees before settling your debt or claims that you are being entered into a “new government program” that will help bail you out of personal debt, there’s a good chance it’s fraudulent. Remember: if it seems too good to be true, it probably is.

Take Your Next Steps with Landmark National Bank

No matter where you’re at in your credit, Landmark National Bank is here to help you along in your financial journey. If you’re ready to break up with your current credit card to find something that perfectly fits your needs, take a look at our personal Visa credit card options. Or, with a variety of personal and business banking options, we’ll help you get where you want to go. Find a Kansas location near you today!