Your credit score is an important financial indicator that can determine whether you can obtain loans or credit cards, and at what interest rate. A good credit score can help you save money and improve your financial stability, while a poor credit score can limit your access to credit and increase your borrowing costs. Therefore, it’s essential to know how to improve your credit score, whether you are trying to rebuild your credit or maintain a good credit rating. Here are some tips to help you boost your credit score:

1. Check your credit report regularly

Your credit report is a summary of your credit history, including your payment history, credit utilization, and other financial activities. Checking your credit report regularly can help you identify any errors or inaccuracies that might be hurting your credit score. You can get a free copy of your credit report from each of the three credit bureaus (Equifax, Experian, and TransUnion) once a year at AnnualCreditReport.com. Review your credit report carefully and dispute any errors or fraudulent accounts that you don’t recognize.

2. Pay your bills on time

Your payment history is the most crucial factor in determining your credit score. Late or missed payments can significantly damage your credit score, so it’s essential to pay your bills on time every month. Set up automatic payments or reminders to help you stay on top of your bills and avoid late fees. If you have past due accounts, bring them current as soon as possible, as delinquent accounts can stay on your credit report for up to seven years.

3. Reduce your credit utilization

Your credit utilization, or the amount of your available credit that you are using, is another significant factor in your credit score. Ideally, you should keep your credit utilization below 30% of your total credit limit. For example, if you have a credit card with a $10,000 limit, you should aim to keep your balance below $3,000. High credit utilization can signal to lenders that you are relying too heavily on credit and may be at risk of default. To reduce your credit utilization, you can pay down your balances, request a credit limit increase, or open a new credit account.

4. Build a positive credit history

In addition to paying your bills on time and keeping your credit utilization low, building a positive credit history can help improve your credit score over time. This means establishing a track record of responsible borrowing and repayment. If you don’t have much credit history, consider opening a secured credit card or becoming an authorized user on someone else’s credit account. Make small purchases and pay them off in full each month to show that you can handle credit responsibly.

5. Avoid applying for too much credit at once

Applying for too much credit at once can signal to lenders that you are a higher risk borrower, which can lower your credit score. Each time you apply for credit, it generates a hard inquiry on your credit report, which can stay on your report for up to two years. Instead, only apply for credit when you need it, and try to space out your applications over time.

6. Keep old credit accounts open

Closing old credit accounts can shorten your credit history, which can hurt your credit score. Therefore, it’s a good idea to keep your old credit accounts open, even if you don’t use them regularly. However, if you have a credit account with an annual fee that you don’t want to pay, you can try negotiating with the issuer to waive the fee or downgrade to a no-fee account.

7. Consider a credit builder loan or secured credit card

If you are trying to establish or rebuild your credit, you may want to consider a credit builder loan or a secured credit card. These financial products can help you build credit by making regular payments and establishing a positive payment history.