Your credit score has a great impact on your finances and also determines whether a loan application will be passed or rejected. So, it is of utmost importance to maintain a good credit score to avail of credit from mortgage or an important line of credit.

If your credit score is low, here are some beginners’ tips on how to improve a bad credit score easily:

• Pay all bills on time
  This does not refer only to credit card bills. You should make it a point to pay all your bills on time each month. This includes student loan repayment installments, rent owed to the landlord, phone bills, and other such bills. The record of this regular payment goes on your credit report and can help as your future lenders are interested in knowing whether or not you repay your debt on time. Having a lot of late payments is a negative mark on you, but your credit score can go up if you pay on time.
• Avoid new credit cards
  You might get many offers to open up new credit cards with good deals, but opening all these cards can lead to a hard hit on your credit score through multiple credit inquiries. So, avoid opening new credit card accounts if you want to build your credit score. This is an important tip on how to improve a bad credit score that most beginners do not know.
• Conduct a check on your credit reports
  There are three credit bureaus: TransUnion, Experian, and Equifax. If your credit score is really low, and you are unable to get your loans approved, do check with the credit bureaus to see whether your credit report might have mistakes, which is quite possible. If you see anything unusual in your credit report that should not be there, dispute this immediately and get it fixed to improve your score. These mistakes can include old collection accounts or even incorrect personal information.
• Keep old credit cards open
  Most people often start closing credit cards in an effort to improve their credit scores. The result is actually the opposite; if you want to keep your credit scores high, keep the old accounts open. Just ensure that you pay off these accounts on time and do not utilize too much of the credit limit. For example, if your credit card has a limit of $5,000, keeping the balance at $1,000 is far better than keeping the balance at $4,500. Just avoid opening new accounts.
• Keep your debt-to-income ratio low
  A low debt-to-income ratio is a sign that you can manage your dues very well within the money you earn. On the other hand, a high debt-to-income ratio shows lenders that you might be a liability when it comes to paying back. When wondering how to improve a bad credit score, start looking after this ratio and manage your spending wisely.