Your credit score is a prominent financial feature that directly reflects your financial health. It gives lenders a clear glance to how responsibly you use credit. If your credit score is higher, it’s that much easier to get approvals for loans, credit cards, and also enjoy prime interest rates.

If a low or a bad credit score is holding you back, there are ways to improve the same and improve your financial position. Obviously, things won’t get better overnight, but continuous effort and discipline can help rebuild your credit. Incorporating tips on how to improve a bad credit score will actually surprise you with the results. Here’s what you should know.

Pay Bills on Time
Lenders take your reliability to pay bills on time into account while referring to your credit report. Your past payment performance gives a clear picture of how your future payments are likely to be. Make sure you make timely payments and don’t postpone any bill payment to ensure a good credit score. Your credit score is masively  hampered by late payments. Keep a calendar reminder to make payments of various bills and loans on time and don’t miss any payment.

Review the Credit Report
Checking on your credit report often is one of the important tips on how to improve a bad credit score. Check what is working in your favor and see what else is influencing your credit score. A peek into your credit report gives you a complete picture about your payment history and even your missed payments to fix at the earliest.

Fix Late Payments
You have to keep up your payments and avoid defaulting to stop past late payments from affecting your credit score. While a single late payment can be overseen, repeated late payments require additional efforts from your end to stop them from affecting your credit score. Talk to your creditors and make arrangements for them to remove the negative marks from your report. For this, you also have to get up to date with your payments, and ensure you make future payments on time.

Maintain a Low Bill Amount
If you’re looking how to improve a bad credit score, make sure to pay off outstanding debt first. All your credit card balances are also added in calculating your final credit score. Hence, it’s important to make payments and ensure low balance on your credit cards. Calculate your average credit usage for a year by adding all credit card balances and divide it by 12. Make efforts to keep the average monthly balance on credit cards to the least amount possible.

Avoid Opening New Accounts
Avoid opening new credit accounts just to have a favorable mix. This habit doesn’t improve your credit score if your outstanding payments are still not cleared. Too many credit accounts can harm your credit score by laying hard inquiries on your credit report. You also tend to overspend and accumulate a high debt in a short span of time. This invites more trouble in clearing your outstanding dues.