For example, some creditors may accidentally report an account being past due or unpaid. Usually, common mistakes are easy to correct. However, if you do not start a habit of checking your report, the problems will go undetected, and can potentially lower your credit score.

It helps to obtain a copy of your report from all three bureaus. This provides an accurate credit standing. Also, it’s suggested that consumers review their credit before applying for a home loan or auto financing.

Pay Bills on Time:

It will help you to improve your credit score. Never underestimate the value of making timely payments to creditors. Being habitually late on a credit card payment will greatly reduce your credit score. Moreover, this bad habit can result in raised interest rates. If possible, mail payments to creditors several days before the due date. This ensures payment reaching the creditor on time. If you have a difficult time submitting timely payments, consider setting up automatic payments.

Decrease Credit Card Balances:

Credit card balances account for approximately 30% of your total FICO score. Thus, reducing balances is a quick way to significantly increase your credit score. To begin, keep credit card use to a minimum. Avoid shopping sprees and spending money frivolously. Attempt to keep balances below 25% of the credit limit.

Once you have successfully reduced or eliminated credit card balances, avoid accumulating additional debt. It may help to payoff balances each month, or establish a spending limit. It’s tempting to close paid off accounts. Although these appear to be a smart credit maneuver, closing accounts will shorten credit history, which lowers credit score.