How to improve your credit score

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Your credit score is a three digit number that rates your credit worthiness, or how likely you are to pay back a loan.

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A credit score scale categorizes 670 to 740 as good, 740 to 800 as very good, and 800 to 850 as excellent.

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A good score shows lenders that you're trustworthy and can get you access to better credit cards with lower interest rates.

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The scale expands to include 300 to 580 as low, and 580 to 670 as fair.

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A low credit score, on the other hand, can lead to higher interest rates, being denied for a loan, and other financial roadblocks that could stand between you and your goals.

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Text, How to improve your credit score.

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If you think your credit score needs a boost, here are some of the best ways to improve it. Use your credit cards responsibly. Whenever possible, pay your entire balance each month, and stay below your limit. Experts recommend using no more than 30% of your available credit if you want to maintain a good, very good, or excellent score.

However, no matter your usage rate, it's key to pay your bill in full. It can be a good idea to take lenders up on their offer to extend your credit line, but only if you think you can do it responsibly.

Get out in front of bills, loans, and debt. Carrying a lot of debt hurts your credit score, but paying it down quickly can help raise it. Making payments on time is also key to achieving and maintaining a good score.

If you can't do this, talk to a banker or advisor about consolidating debt to better manage payments. It's important to keep an eye on your credit reports and review them annually. Credit report errors are more common than many people think, which is why it's smart to check for any that could be harming your score.

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If you do find a mistake, you can contact the credit reporting agency to sort it out.

Lastly, don't open too many accounts at once opening multiple accounts in succession can actually lower your credit score. The next time you open a new credit line, wait at least a few months before applying for another one. Think of it this way-- building good credit is a marathon, not a sprint. There's no way to fix your credit score overnight. But maintaining these good habits over time will help you get there and get you back on track to reach your goals.

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