How to Rebuild Your Credit Score

With the right decisions and a little patience, you can improve your credit score.

4 min read

Developing good financial habits is a journey, and N26 wants to be there for you every step of the way. We’re here to help you navigate the ins and outs of financial wellness, and that includes your credit score. If your score isn’t as high as you’d like it to be, rest assured that you can change it. A not-so-greatcredit score isn’t a life sentence. With the right decisions and a little patience, you can boost your score. Here’s how.

What is a bad credit score?

Credit scores range from 300-850 and are based on your credit history. Here’s the general breakdown based on FICO and VantageScore scales:

  • 300-579: Poor

  • 580-669: Fair

  • 670-739: Good

  • 740-799: Very Good

  • 800-850: Excellent

If your score falls at the lower end of the scale, it can be tempting to ignore the problem and hope it goes away. But your credit score can have a long-term impact on your financial freedoms in life, like whether you can lease a car, rent an apartment, or buy a home. Potential employers may also check your score as part of the hiring process.

How do I improve my credit score?

You can help raise your score with several different strategies. Choose one to try first, and then add the others as you get the hang of it.

Increase your credit card payments: Making larger payments will reduce your outstanding debt faster. It will also increase your percentage of available credit (the amount of money that you have access to borrow), which is one factor that determines your score.

For example, let’s say you owe $6,000 on a credit card with a $10,000 limit, which gives you $4,000 of available credit. When you pay off the $6,000, your available credit will be $10,000 — and therefore your credit score will be significantly higher.

Use a co-signer for your loans: A co-signer is a person who signs a loan with you and agrees to pay the debt if you do not. It is usually a parent, older family member, or close friend. Younger people often need co-signers to rent an apartment or lease a car. A person can also become an “authorized user” on a co-signer’s credit card account so that they can use the card.

Having a co-signer can help your credit score because it allows you to build a good credit history. Making regular, on-time payments on a loan or credit card is one of the best tactics for boosting your credit score. But to do that, you have to be able to qualify for a loan in the first place — and a co-signer can make that possible. As long as you pay your consigned loan as agreed, you’ll be improving your credit history.

Budget to pay off debts quickly: The amount of money that you owe is a huge factor in your score, so paying off large sums of debt is a very effective way to repair your credit. When you make solid progress on your payments, it shows potential lenders that you have the ability and the willpower to pay back money that you have borrowed. From student loans to credit card bills, you can pay off your debt more quickly when you stick to a budget.

But how do you budget?

  • Try the 50/30/20 rule, which divides your monthly income into 50% for needs, 30% for wants, and 20% for savings and debt repayment.

  • Discover exactly what you’re spending money on with automatic expense tracking in the N26 app.

  • Learn how to break bad spending habits like charging too much on your credit card.

  • Use smart budgeting tools to get your finances on track.

  • Visualize your goals with Spaces, which helps you to take control of your spending and save money more easily.

Avoid new debt by using a debit card: Using your credit card for everyday purchases is an easy way to accrue more debt, whether you mean to or not. It might just be too tempting to charge what you want today and pay for it later, but this won’t help your credit score if you can’t pay it off. So remove temptation instead by replacing your credit card spending with a debit card. When you only have an N26 debit card in your wallet, you won’t be tempted to make purchases on credit.


Build a better financial future with N26: You have the power to improve your credit score and to change your financial future. With N26, you can live and bank your way with an app that’s designed to give you control of your money. Get the support you need to make the right decisions and reach your financial dreams, no matter where you begin. Start a new path today that your future self will thank you for. N26 will be here with you every step of the way.

Open an N26 account in 5 minutes straight from your phone and experience banking that is transparent, secure, and designed for you.

The N26 account is offered by Axos Bank®, Member FDIC. N26 Inc. is a service provider of Axos Bank. All deposit accounts of the same ownership and/or vesting held at Axos Bank are combined and insured under the same FDIC Certificate 35546. All deposit accounts through Axos Bank brands are not separately insured by the FDIC from other deposit accounts held with the same ownership and/or vesting at Axos Bank. The N26 Visa® Debit Card is issued by Axos Bank pursuant to a license by Visa U.S.A. Inc. The N26 Visa Debit Card may be used everywhere Visa debit cards are accepted.

By N26

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