Having a good credit score is a key part of your financial health. Whether you’re applying for a credit card, a car loan, a mortgage, and sometimes even a new job, having a high score greatly increases your chances for success. A high credit score also means you will receive preferred interest rates, leading to more cash in your pocket. Take Seven Easy steps to fix your credit.

1. Watch those credit card balances. Often, the credit agencies look negatively on individuals whose credit cards have more than 30% of their credit limits being used. It’s a sign to lenders that you are overstretched financially and may have a higher probability of defaulting on the payments


2. Eliminate your balances by paying them down or consolidate your credit cards into a personal loan. As already discussed, utilizing less than 30% of your total available credit positions you for the best score possible. Consolidating your credit card debt into a single personal loan often reduces the amount of interest you will pay while also making it easier to manage your payments in a timely fashion. Having several credit cards to pay each month increases your chances of missing a payment accidentally.


3. If you have old loans on your credit report that have already been paid off, leave them on your report! These old loans demonstrate that you were able to responsibly satisfy your financial obligations and looks good to future lenders decide on whether to issue you a credit card or give you a loan.


4. Pay your bills on time! This is critical to raising and keeping a good credit score. Missed or overdue payments are a clear sign to lenders that you may be risky to loan money to. Show them you are responsible by always paying on time. Take advantage of the loan or credit cards’ online tools that allow you to set up “auto pay”. This will ensure you never miss a payment, even if you’re only paying the minimum balance.


5. Don’t appear risky. Missing payments or suddenly paying drastically less to your credit cards can indicate that your financial circumstances have changed for the worst. Taking cash advances or using your cards at businesses such as pawn shops or divorce attorneys indicate to lenders that financial stress is ahead, and they should steer clear.


6. Don’t obsess, but be aware of your score. If you plan on buying a car or a home, you should be looking at your credit score months in advance to make sure you have the best score possible to secure you the best loan terms possible. Higher scores mean higher loan amounts and lower interest rates. So, while you don’t need to check your score every day, it’s important to stay on top of it just in case it changes for the worse or there suddenly has appeared some mistaken blemish on your report.


7. Report inaccuracies on your report immediately to the credit bureaus. Mistakes on credit reports happen more than you would think. So, if you see something on yours that doesn’t seem right, investigate. And if it turns out there is an error, report it immediately to get it resolved and/or removed from your report. CreditSesame.com is a great and free resource to get access to your score and report. They also have monitoring services that will proactively inform you of any sudden changes to your report.

Many Americans underestimate the importance and benefit of a good credit score. So, follow our advice and an improved credit score should be in your future!