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A low credit score can cost you employment opportunities, make financing difficult to get or even prevent you from qualifying for a cell phone or satellite tv equipment. Fortunately, there are steps you can take to improve your credit score. 

1. Pay Your Bills When They Are Due

One of the biggest factors a consumer reporting agency looks at when determining your creditworthiness is your past payment history. Missed or late payments will negatively impact your score. If you are trying to improve your credit score, you need to make sure you make all of your payments on time. This includes credit card bills, utility bills, car payments, rent and any other installment accounts you may have. It is a good idea to set up automatic payments where available so that you can make sure you do not miss any payments. 

2. Pay Off Debt and Keep Credit Card Balances Low

Another attribute that affects your credit score is your credit utilization ratio. This ratio compares the total amount of debt you have to the total amount you could have if you maxed out all of your revolving accounts. You can calculate this ratio by adding all of your credit card balances together and dividing that by your total combined credit limit. Most lenders prefer borrowers with a ratio of 30% or less. You can improve your ratio by paying down balances on your credit cards; however, do not close the accounts, because this will lower your total credit availability, which can negatively impact your ratio.

3. Do Not Apply for Too Much Credit

Whenever you apply for credit, there is usually an inquiry on your credit report. Too many inquiries can negatively impact your credit score. Do not respond to unsolicited offers of credit if you were not already planning to apply for credit. 

4. Dispute Mistakes on Your Credit Report

You should check your credit reports with the three major credit bureaus at least once per year. Incorrect negative items on your report can cause your score to be lower than it should be. If you see anything in your report that is not correct, you should dispute this information with the credit bureau. If they find in your favor, they will remove the incorrect information from your report.

A low credit score can cost you money and opportunities. These four steps can help you improve your credit score. 

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