The Best Ways to Make Your Credit Better

A good credit score can open up financing opportunities. People with high scores can easily qualify for home loans and auto loans, and having a good credit score qualifies applicants for low finance rates. Credit scores vary, but according to Experian, one of the three major credit-reporting bureaus, a good credit score is 700 or higher.

Paying Bills

Pay your bills on time each month to build a better score. Your payment record makes up 35 percent of your personal credit score. Knowing this, you can repair a low score by paying credit card statements and other loans on time. Making a few timely bill payments isn't enough to completely repair your history. Rather, the key to a better score is to pay your bills on time consistently. Your score improves little-by-little each month and eventually reaches a high rating.

Resolve Debt

Carrying few credit card balances is another key to building a better credit score. Similar to payment history, the amount owed to creditors has a substantial affect on scoring. The amount you owe makes up 30 percent of your score. For this reason, paying down credit card balances or keeping your balances low improves your personal score. Controlling debt indicates self-control, and future lenders are more likely to extend credit to you.

Fix Report Mistakes

Removing any mistakes on your credit report can quickly improve your credit score. Some consumers are unaware of credit report mistakes until they're denied for financing. Check your own report at least once a year; and if denied for a credit card or loan, request a copy of your report to determine the reason for the denial. Mistakes such as collection accounts or liens reported in error can stop credit approvals and reduce your personal score. Get your free reports from AnnualCreditReport.com and urge creditors to update your report with accurate information.

Add Years of Positive History

Request the help of someone with a long, positive credit history to improve your record. Asking your spouse or parent to add your name as an authorized user on one of their credit cards can quickly add years of positive history to your personal report. Once you become an authorized user on the account, the creditor begins reporting the account information on your credit report. Having an account in good standing reflected on your report can reverse a low credit score.