These days, having a good credit score can mean the difference between paying a few hundred dollars in interest or paying thousands. In addition, a bad credit score could possibly hold you back from gaining employment or even obtaining a place to live. While improving your credit score does take time and effort, there are a few things you can do to begin repairing your credit today!

Obtain a copy of your credit report

The first thing you will want to do is obtain a copy of your credit report. There are a few ways to go about doing this. If you have recently been declined for a loan of any kind, you have the right to request a copy of your credit report. By law, you are also entitled to one free credit report per year through each of the three credit reporting agencies. Once you have a copy of your credit report, you will want to begin reviewing it for errors. Mistakes can include: liens, judgements, bankruptcies, collections, and personal information. Errors can easily be disputed online through the credit bureau that is reporting the error.

Set up auto pay

As you make the journey of improving your credit score, it will be of the utmost importance that your bills be paid on time. If you are like most people, you may struggle with paying your bills in a timely manner. You can avoid late dings on your credit report by setting up an auto payment to your creditor. Call your creditors and ask if they can take a payment from your bank account on a designated date each month. Not only will your accounts stay current, but you will also have the peace of mind of knowing that your credit score is improving.

Apply for a secured card

If your credit is not as clean as you would like it to be, you can apply for a secured credit card to help boost your score. With a secured card, you place a deposit on the card that will become your line of credit. For example, if you are approved for a secured card of $250, you would make an initial deposit of $250. This benefits both you and the lender. The line of credit is coming from your deposit, so there is little risk to the lender if you default on your payments. Because the card is secured by the deposit, they are also relatively easy to get approved for. As your credit score improves, you can then apply for an unsecured card.

Apply for an unsecured card

Once your score is above 700, you may want to consider applying for an unsecured credit card. On that note, avoid applying for multiple accounts at the same time. Each inquiry on your credit report will slightly lower your score and can be a red flag to the lender that you may be on the verge on a spending spree. Once you are approved for an unsecured card, you will want to strive to keep your spending below 20% of your approved limit. There is no faster way for your credit to take a hit than to max out a credit card. Responsible spending also demonstrates to the lender that you are capable of self-control so they may be more inclined to raise your limit and offer better interest rates.

Add your name as an authorized user on an established account

Adding your name as an authorized user on a family member’s account should be reserved for those times that you need to rapidly improve your credit score. There are pros and cons to this option that need to be weighed carefully by both parties before you take that step. As an authorized user, there are some lenders that will report on your credit as well as the primary card holder’s. Keep in mind that any spending you do on the card will become the responsibility of the primary card holder, so you should only use this option if you feel that you can discipline yourself enough to avoid placing a financial burden on your family member. Also, keep in mind that being an authorized user is a two-way street. If the primary card holder falls delinquent, your credit score may be affected too!

Keep old accounts open

It may be tempting to close old accounts, but you may want to reconsider keeping them open. Closing your old accounts will not improve your credit score and in fact, may have the potential of lowering your score! A better option would be to call your lender and let them know you are considering transferring your balance to a card with a lower interest rate. Ask them if they can offer a lower rate on your current card because you would like to stay with that particular bank.

Improving your credit score won’t happen overnight. You may have old habits that need to be retrained and a course in financial management can help you in the long run with tips on how to manage credit, pay off debt, and become more financially responsible. By putting these tips into practice, you will see an improvement not only in your credit score but also your quality of life.