Your credit score is vitally important to your financial health, but it’s one thing many people don’t think about much. If your credit score is low, you’ll have a much harder time getting approved for a loan with preferable terms. A good credit score is also extremely important for obtaining an affordable mortgage, should you ever wish to buy a home. With that in mind, below are five tips you can use to boost your credit score.

Pay Down Your Credit Card Debt

Certain kinds of debt are weighed more negatively by credit reporting agencies than other debts you may have. Student loans and mortgages obtained from banks are generally seen as better forms of debt, whereas credit card debt is usually classified as the worst kind of debt.

If you have a lot of debt on your cards, start paying them down. Credit agencies pay attention to how much of your available credit you’re using monthly, and the higher that percentage is, the lower your credit score will be. Aim to make that credit utilization average no more than 30%.

Pay Your Bills on Time

Your bill payment history is another thing that can factor negatively into your score. If you have late bill payments, those appear on your credit report and will take a bite out of your score. Always make sure you pay your bills on time. If you can’t afford the monthly payments, talk to the creditor to see if the payments can be reduced. If you have a number of monthly payments and you can’t afford all of them, talk to banks in Utah about consolidating your debt into one monthly payment. While it may be difficult to pay your bills on time every month, you need to stay current on your payments.

Correct Errors and Fraud

Pay attention to your credit score. There are several sites that offer a free monthly look at your credit score, so you can stay current. Watch your score, and if you notice it drop, look into what caused it. Sometimes, your credit score might fall through no fault of your own. Mistakes can and do happen, but they’re generally easy to resolve. Additionally, by paying attention to your credit score, if your identity is stolen, you could catch and report it before the theft does serious damage to your financial health.

Keep Your Oldest Credit Accounts Open

One thing you may be tempted to do to improve your credit score is to close a bunch of your credit card accounts. Be careful before doing this. Depending on the history of your accounts, this can have the reverse effect. Keep old accounts open to ensure you have a longer credit history on record and your utilization is lower. If one of your older credit accounts has an annual fee, negotiate with the credit card company to remove the fee. Closing the account entirely should be your last resort.

Create a Budget

One reason why many people run into problems with credit and borrowing is that they refuse to budget out their expenses each month and each week. Doing so can save you a lot of headache. Budgeting doesn’t have to be hard. If you have a smartphone, there are several highly-rated budgeting apps that help you track your expenses and allot funds into specific categories. Budgeting doesn’t mean cutting out everything fun or saying no to everything that you want. It’s about being aware and in control of where your money is going and how much you’re spending. That awareness will ultimately improve your financial health.

While improving your credit score can be difficult, by following the tips above, you’ll accomplish it over time. Don’t neglect your credit score any longer. Start improving your financial health today.