If your credit report is your financial report card, then your credit score is the actual grade. And maybe your grades weren’t all that important once you got out of school but… in the money world, your financial transcript is very important. If you’re flunking your credit report, you’ll pay a higher interest rate on your credit card. It’s basically supposed to tell people who are looking at it—like a lender—how trustworthy you are, or how likely you are to pay them back. So, here are five ways to boost your credit score.
Pay Your Bills on Time
Not to sound patronizing, but it’s worth repeating: pay your bills on time. Annnnd one more time: pay your bills on time. It’s the best way to get your score up where you want it. You are rolling your eyes at me because you already know this… okay, fine. But are you already doing this? If you’ve missed a couple deadlines, consider enrolling in auto-pay, or set a month reminder on your phone to pay those bills.
Don’t Cut Up Unused Credit Cards
This one might be a little surprising, but bear with me. Let’s say you have some random gas cards or department store cards you don’t use anymore. Maybe you opened a store card to take advantage of the extra discount you get when making a purchase that day, then never used it again. A credit score misconception is that you should cancel those cards if you want to improve your credit score. Wrong. You want a record of being able to pay your credit card bills, not being a serial card opener and canceler. The best way to keep up steady payments that you can sustain is to put one regular bill, like cable or utilities, on each card. Set that bill to autopay on your credit card so you are technically using your card but not thinking much about it while racking up good payment points.
Build a Credit History
Okay so, funny story, back before I went to Money Rehab, I used to keep my cash in a safe. True story. As you can imagine, my credit score was crap because of that. It took me a few years of disciplined use of the plastic to get it somewhere respectable. It was all well and good to try to use cash or a debit card until I started thinking about the idea of buying a house. Because my credit history wasn’t as strong as it could have been, getting a mortgage was a challenge. It’s not fair. It’s just the way it is.
Don’t Max Out Your Cards
Keep the balance at no more than about 20% of your limit. So if your limit is $5,000, don’t spend more than $1,000. A big factor in determining your credit score is the ratio between what you are borrowing and your access to credit. If a bank thinks you owe more than you can pay back, your score will feel the backlash
Limit How Often Your Credit is Checked
Any time you look for a loan, which includes applying for a credit card, a credit check is done on you. So what, right? Wrong. Every time your credit is checked (by someone else), your score will actually go down. Why? Because the perception of having too many accounts or trying to borrow too much (called overleveraging yourself) can work against you. Stop the cycle of impulsively opening cards and having credit remorse. Your score won’t improve by taking it out on your past mistakes by impulsively snipping up the old cards. Even if it feels great to do, that “snip snip” won’t help. Your score will only improve by your being mindful of what you are doing from here on out. You don’t have to/shouldn’t accept every credit card offer that comes in the mail. Open accounts you need, but only accounts you need, and your credit score will eventually show you love in return.
Remember that your credit score is graded on a scale between 300 and 850, with 300 being the worst and 850 being the best. Assume an A average in school is kind of analogous to a 750 credit score. In general, those with scores of roughly 750 and above tend to qualify for whatever access to credit they want. If you don’t have that, you’re not doomed. You just might want to know more about how the class is graded so you can do better in it.
A version of this article was originally published on Forbes.