Your credit score is one of the most important numbers in your life. It’s the number that tells lenders if you are worthy of credit. In addition, it can determine if you qualify for an apartment or a job. If you have a credit score that is not ideal, it can be very stressful. Bad credit can lead to thousands of dollars in interest charges. Therefore, it is important to improve your credit score. The process may take time, but if you follow some basic tips you will be on your way to a higher credit score.

1. Check Credit Reports

The first thing you should do is check all three credit reports. Errors are very common on credit reports. If you carefully scan your report, you are likely to find at least one mistake. When you dispute a mistake on your credit report, the item could be removed. That is the fastest way to a higher credit score.

2. Keep Payments Current

The biggest component of your credit score is your payment history. Obviously, the first step is to pay your bills on time. Doing this will gradually improve your credit score. If you have accounts that are delinquent, bring them current. As long as you keep paying your bills on time, you will see improvements in your credit score. If you feel like you won’t be able to make a payment on time, don’t just ignore it. Contact your creditors. They will likely work with you so that you don’t get a negative mark on your credit report.

3. Reduce Debt

The next biggest factor in your credit score is the amount of money you owe. The biggest part of this is your credit card debt. Specifically, your credit score looks at the utilization on your credit cards. This means that you must keep your balances low. If you have cards with high balances, your score will really suffer. It is important to reduce your balances so that your score can benefit.

4. Your Age of Credit Matters

Another big factor in your credit score is the average age of your accounts. There are two things you should always do when it comes to this. First, never close accounts that are in good standing. If you have a credit card you don’t plan on using anymore, keep the account open. By closing it, you lose a positive line of credit. Additionally, your credit history will appear shorter. The other thing to do is watch how many new accounts you have. It is never a good idea to open a bunch of credit accounts at the same time. That severely reduces the average age of your accounts. You should always space out new accounts.

5. Diversify Types of Credit

If your credit report only contains installment loans, your credit score will suffer. Lenders want to see that you can manage different types of credit. Therefore, you want to have revolving and installment credit. If you don’t have a credit card, open one up. If you don’t qualify, consider a secured credit card. You may take a hit from the new account, but that will be negated because you diversified your credit. After you establish payment history on the new account, your score will increase.