You go to qualify for a mortgage, apply to rent a property, or try to get a car loan and find out that your credit score (FICO) is not where it needs to be.  Less favorable credit scores can disqualify you from some types of loans, or result in less desirable interest rates.  So what can you do?

There are some fairly easy ways to improve your credit score.  It is not something that can be done overnight, but by doing the following and being consistent over time, you can improve your credit score and maintain it.

1. Pay bills on-time.  One key to good credit is month after month of on-time payments.  The history of showing your bills paid on-time builds your creditworthiness over time.  Conversely, those 30, 60, and 90 day late’s have a damaging impact on your score.
2. Pay off your balance each month. Or, keep balances low.  If you are able to, it is always best to pay off your balance each month.  Not only does this improve your credit score, but it also saves you money because you won’t be paying the ridiculously high credit card interest rates.  But, if you are not able to pay off your cards each month, the next best thing is to keep your balances lower than 30% of your total credit limit on each credit card.  So, for example, you have a credit card limit of $10,000; you would want to keep your balance lower than $3,000.
3. Keep credit card balances to a minimum.  Having small balances on a number of cards also negatively impacts your credit score.  It is best to pay-off all those credit cards that have small balances, and then use one or two go-to credit cards that you use for everything.
4. Increase your credit limit.  Not able to keep your balance below the 30% of the current credit limit?  You can call your credit card company and request an increase of your credit limit.  The important thing with this is NOT to spend any of your new credit (don’t increase the balance when you increase the limit).
5. Make extra payments.  Let’s say your credit card bill is due on the 10th of each month, and you pay it on-time.  As you continue to charge throughout the month your account starts building what will make up the next month’s balance due.  By making another payment later in the month, maybe a partial amount of what will be due on your next statement, this will improve your credit score. 
6. Do all your shopping (for credit) in a short amount of time.  Every time you apply for credit (apply for a credit card, apply for a home loan, auto loan or student loan, etc), when that creditor runs your credit report, your credit score takes a small dip.  Have you ever seen that line “too many inquiries” as a reason for a decrease in your credit score?  This is a common one.  If you are shopping around for the best interest rate or best terms, it is best to do all of it within a 14-day window if possible.  
7. Monitor your credit.  By law you are eligible for 1 FREE credit report per year from each of the big 3 credit bureaus:  TransUnion, Experian, and Equifax.  Experts recommend getting one every 4 months, staggering between these 3 companies (so that you get 1 free report every four months).  Go over your credit report to make sure that everything is as it should be.  Pay close attention to any late payments or unpaid bills.
8. Dispute inaccuracies.  If you find something that is incorrect, such as a late payment or incorrect balance, it is important to dispute each inaccuracy with the Bureau reporting it. 
9. Settle bad debts.  If you have any accounts that have been sent to collections, its best to settle up.  Unfortunately, they will remain on your report, but they hurt your score less when they have been taken care of.  Reach out to the creditor (collection company) and negotiate a payoff.  Get an agreement in writing and pay it according to the terms negotiated.
10. Use credit.  It takes credit in order to establish a good credit score.  Credit is built over time by opening credit accounts, using the credit (charging things to your credit card), and paying on-time, especially paying off your balance on-time each month.

It’s never too late to improve your credit.  Many people have made mistakes where their credit is concerned, missed a payment or two, or taken on more debt than they could afford.