How to Improve Your Credit Score

Americans have an average credit score of about 700. The higher your score, the better interest rates you can get on your credit cards, car loans and your mortgage loans as well. With the importance of your credit scores weighted so heavily it's important to be aware of the top factors that affect your credit score so that you can check your credit report for accuracy.

Review your credit report for accuracy - One of the easiest ways to increase your credit score is to remove inaccuracies. If you're not sure if there are inaccuracies on your credit report, get a free credit report from

Pay your bills on time - This is a big no-brainer, but don't let any bill go unpaid. Set up payment reminders and make sure all your bills are paid on time, no exceptions.

Have a varied credit history - Don't have all your credit tied up in credit cards. It's important to vary the types of credit in your credit history, from revolving accounts to mortgages to installment loans.

Keep your credit utilization ratio in mind - Your credit utilization ratio is the ratio of how much debt you have to available credit. By keeping this low, you will show potential lenders that you are responsible with your credit and a good credit risk.

Avoid derogatory records - If you're paying your bills on time, every time, this one is not that hard to miss, but still worth mentioning.

Utilize the 100-word credit bureau statement - This statement - used when you find an inaccuracy on your credit report - may not directly increase your credit score, but it may mean the different between being approved and not approved, if you've got some dings on your credit report.

Don't apply for too many credit cards - With all the offers available to you for new credit cards, you should be careful about how many you apply for, as it may reduce your credit score.

Avoid retailer credit cards - When standing at the register at your favorite department store, it may be hard to resist the 10% off your purchase if you open a retail credit card, but buyer beware, this may not be the best move for your credit score.

Maintain old lines of credit - One of the main factors in your credit score is how long you've had credit and the average age of your credit accounts, so don't close your old accounts. Let lenders close them.

Protect yourself from identity thieves - Identity theft is a serious problem and if not caught early, it can greatly damage your credit score. Keep an eye on your credit report and make sure to shred any bills with your credit card or social security number.

If you're following all of the recommendations above, you're using your credit wisely, so keep up the good work! But if you're not, it's never too late to raise your credit score. Your score will grow and change with time, but it's up to you to make sure that the changes are positive.