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Do you know every little detail that goes into your credit rating? Have you heard of FICO scores? If the answers are no or if you’d like to improve your credit score, read along.

First things first. Your credit rating is a score that lenders look at if you’re applying for a loan, mortgage, or credit card. It tells them how much risk they’d be taking if they lend you money. The higher your score, the more likely they are to lend you money or even give you better interest rates. This score is based on a series of factors all related to your credit history (your payment history, amount owed, and many others). FICO Scores  are the most widely accepted by the top lending institutions.

Now on to improving your score. Improving your credit score is like losing weight. There isn’t an easy and fast way to do it – and if there is, it probably isn’t a healthy one. Therefore, if you every want to buy a house, a car, or anything else on credit, take care of your credit score!

First, you must know where you’re standing. Check your credit report not only to know what it says, but to check for errors regarding late payments or any other incorrect data that affects negatively your score. You’re legally entitled to one free credit report annually (not score – includes everything except the score itself) from each of the three main credit bureaus: TransUnion, Equifax, and Experian. Request them here.

Make your payments on time! This can either make it or break it. Making late credit payments can have a huge effect on your rating. Set up reminders so that you remember to pay your credit cards and loans on time every month – and don’t make just the minimum payment.

Another thing that will help your credit score a lot is to reduce the amount you owe. If you’re having trouble making the payments every month, or if you’re only able to make the minimum payment, stop using your credit cards. Interests will keep compounding and soon you’ll have unmanageable debt. Set a goal of paying off the credit card(s) with the highest interest rate(s) first and make at least the minimum payments on the others.

If you have had a dark past regarding your payment history, start making things right now by making payments on time and reducing your debt. This won’t immediately boost your credit score, but if you work on it constantly and regularly, you’ll start seeing improvements over time.

Try to always keep your balance on your credit cards low and don’t open a large number of credit cards you don’t need. There are a lot of other tips you can use to improve your credit rating. Stay tuned for a more detailed article on this topic.