We’ve talked about the importance of your credit score and how financial institutions use it to decide whether to lend money to you and at what rate. So you know that a not-so-great credit score can mean higher interest rates — or even trouble getting a loan or credit card in the first place. The good news is, credit scores are not set in stone, and there’s actually a lot you can do to improve yours over time. Check out these 6 tips you can get started on today:

1. Check your credit reports for errors.

Start your journey to better credit by getting copies of your credit reports. Yes, we said reports, plural. There are 3 major credit reporting agencies in the U.S.: Experian, Equifax, and TransUnion. They may all contain slightly different information about your credit history, and unfortunately, errors can occur. In fact, a study conducted by the Federal Trade Commission (FTC) found that one in four people identified errors on their credit reports that might affect their credit scores.

Fortunately, you can get a free copy of each report once a year from AnnualCreditReport.com. Look them over carefully to make sure:

• Your name and address is spelled correctly
• All of your loans and credit cards are listed, and your payment history is reflected accurately
• There are no duplicate listings for the same loan or credit card
• There are no accounts listed that you didn’t open
• Any bad debts older than 7 years have been removed from the report

If you spot any errors, contact the credit reporting agency to dispute the incorrect information. You can start most disputes online through credit reporting agency’s website. You should also contact the organization that provided the information to the credit reporting agency (for example, your bank or credit card company) and ask them to correct the information as well. Check out this tip sheet from the FTC for more information on disputing errors on your credit report.

2. Pay all your bills on time.

Sounds simple enough, but we can’t emphasize just how important this is for your credit score! Payment history is the single biggest factor that affects credit scores, and late or missed payments can stay on your credit reports for up to 7 years. If think you might be late making a payment to a creditor, contact them right away. Ask if you can make alternate payment arrangements to keep the creditor from reporting a late or missed payment to the credit bureaus.

Already missed a payment or two? Do your best to get caught up right away, then stay on track going forward. Over time, a consistent on-time payment history will help outweigh those missed payments.

3. Pay off debt.

How much you owe is another big factor in determining your credit score. If you have a large amount of debt or are carrying balances on your credit cards for long periods of time, it can negatively affect your score. Paying off (or at least pay down) the debt will help improve your score.

Need help getting a handle on your debt? Start by creating a budget. Then look for places you can cut back on non-essential spending so you can use that money to pay extra toward your debt. Even paying an extra $10 or $20 a month can help you erase your debt faster.

4. Keep your credit utilization low.

This goes hand in hand with the above. One of the things that factors into your credit score is how much of your available credit you’re using. This mainly applies to credit cards and other revolving accounts, so you can think of “available credit” as the sum of all of your credit limits.

Even if you don’t have a lot of debt in terms of the total dollar amount, if you’re using a lot of your available credit, it can lower your credit score. A general rule of thumb for credit cards is to use no more than 30% of your limit for any balance you carry over each month. So if you have a card with a limit of $5,000, that means carrying a balance of no more than $1,500 from month to month. If you can pay your balance in full each month, that’s even better. To reach this goal, try making smaller payments throughout the month. Many people find this strategy is easier to manage than making a single large payment all at once.

5. Be careful about closing old accounts and opening new ones.

Have a credit card you’re not using? Think twice about closing it. Though it may sound counterintuitive, leaving that account open can actually help your credit score because it keeps your utilization rate lower. Plus, closing an account won’t make any negative information you may be trying to get rid of disappear. Accounts stay on your credit report for up to 7 years, even after they're closed.

When it comes to opening new accounts, resist the urge to open new credit cards just to improve your utilization ratio. This can actually backfire and lower your credit score. Each time an inquiry is made on your credit report (which happens when you apply for a new account), your credit score can dip slightly. Multiple inquires can have a bigger impact because it may indicate you're a higher credit risk.

6. Consider getting a secured credit card.

If you have little or no credit currently — or you need to rebuild your credit — a secured credit card can help. At Frontwave, we offer a Share Secured Visa® credit card that’s backed by money you deposit in a special savings account. The money stays in the account as long as you keep your credit card open, and you can use your new credit card anywhere Visa is accepted. As you make regular payments, you build your credit score. Sound like something you might be interested in? Give us a call or visit a local branch to learn more.

Stick with it.

You won’t be able to acheive an 800 credit score overnight, but by consistently using the tips above, your credit score will slowly build over time — earning you better interest rates and better access to the types of credit you want.<

If you need more advice on improving your credit or you’re having trouble managing your debt, don’t forget that Frontwave Credit Union Members have access to financial counseling from GreenPath Financial Wellness. GreenPath counseling sessions are free, no-pressure, and 100% confidential. You can contact them at 877.337.3399 or www.greenpath.com/Frontwave.