You may not realize how much your credit score impacts your personal finances. Lenders generally give the very best interest rates and loan terms to customers with the highest credit ratings. Depending on how much you are borrowing and for how long, this could be a difference of hundreds if not thousands of dollars over the life of your loan.

Whether you are trying to repair a not-so-perfect credit history or simply want to improve an already good score, there are certain things you can do which should steadily increase your overall credit score.

Credit Score Boosters

• Always pay your bills on time. Your payment history is the single most important factor which influences your credit score. Lenders want to see a strong pattern of consistent, on-time payments. Even one late or missed payment can seriously undermine all your hard work so make sure you pay all of your bills on time each and every month.
• Don't let your outstanding bills go to a collection agency. Sometimes it's easy to overlook a traffic ticket or a library fine or even a medical bill. But any of these seemingly insignificant accounts can potentially end up on your credit report and do a considerable amount of damage. Keep up with all of your debts. If you have an unexpected cash-flow problem, contact the specific creditor and at least make payment arrangements with them directly. Ignoring your financial obligations won't make them go away.
• Maintain open, active accounts which are in good standing. Many people think if they don't have any type of credit accounts, they will have a high credit score. But actually the opposite is true. If your accounts are all closed or show numerous missed or late payments, your credit score will suffer. Plus, this is a red flag to potential lenders indicating you may have serious money-management problems. Strive to have a reasonable number of accounts that you pay in a timely manner every month.
• Keep your balances low. Of course a car loan or mortgage is probably going to show a large outstanding balance. Work hard to reduce these balances by making extra payments whenever possible. For credit card accounts, the smartest move is to pay off the entire balance each month. This saves you money by avoiding costly interest charges. Financial experts suggest carrying no more than 30% of your total credit limit as an outstanding balance. Having a large number of credit card accounts that are all maxed out can seriously damage your credit score.
• Don't close old accounts. Your first instinct might be to close an account which you haven't used in a while. But the age of your accounts is considered when determining your credit score so it's better to have a mix of older and newer accounts. Dust off an old credit card and use it sparingly each month- perhaps for a dinner out or to purchase some movie tickets. Then pay off the entire balance when you receive your statement. The important thing is to keep older accounts active but pay them off each month.
• Have a mix of credit accounts. Typically consumers may have a mortgage, some type of car loan, and credit card accounts. Your credit score generally improves when your credit report indicates that you can responsibly handle different types of credit. This doesn't mean you should rush out and buy a home just to improve your score. Open accounts only when you truly need to and be thoughtful about the types of accounts you choose.
• Check your credit report at least once a year. Every consumer is entitled to one free copy of their credit report from each of the three main reporting bureaus once a year. These credit agencies are TransUnion, Experian, and Equifax. If you are ever denied credit, you are also entitled to receive a free copy of your report. It's important to get in the habit of checking your credit report and reporting any inaccuracies to the credit bureaus. You have the legal right to dispute false or out-dated information and have it removed from your report (with the proper proof, of course). Don't automatically assume everything in your report is correct. Mistakes do happen and it is your responsibility to stay on top of what is contained in your own report.