Raising your credit score isn’t exactly the first thought for most people until it’s time to get a loan. People with good credit are more likely to get the loan they need and will get lower interest rates, which ultimately means saving money. If you’d like to boost your credit score, incorporate the tips below to maximize your score.

By understanding the five factors that make up your credit score, you will be better equipped to improve your score:

Your payment history – 35%. Are you paying on time, am I late or have you missed payments? Payment history is the biggest determinant of your credit score because it really represents how good you are as a borrower.

> Amount currently due – 30%. This refers to your ability; in other words, how much of your available credit are you using? Borrowing less than 35% of your capacity will help prevent your credit score from being negatively impacted. For example, if you have the ability to borrow $ 20,000, you will only want to borrow less than $ 7,000 to prove your responsibility for managing the money.

> Length of your credit history – 15%. The longer you have credit at your disposal, the better. If you are thinking of closing accounts, do not close ones you have been open for a long time; it is better to close the most recent ones.

> Number of new accounts – 10%. Don’t open new accounts too quickly, particularly if you have a short credit history. New accounts will lower the average age of your account, which could affect your score if you don’t have much other credit information.

> Types of credit – 10%. It’s best to have a balanced mix of credit cards, retail accounts, installment loans, and / or mortgages.

So now that you know what helps determine your score, let’s dive into how you can proactively increase your credit score.

1. Pay your credit cards
The second most important factor in determining your credit score is your ability. By discounting your credit cards, you immediately increase your capacity which, in turn, will increase your score. For example, if you have a credit card with $ 10,000 of available credit and a balance of $ 5,000, you are borrowing 50% of your capacity. If you can pay that card to say $ 1,000, then your borrowing ability just went up … and so did your score!

2. Ask your credit card manager for an increase in your credit limit
Aside from paying your credit card, another way to increase your capacity is to ask for a credit limit increase. In many cases, credit card issuers will increase limits on customers with good credit history. If you can’t get a raise with your current card, consider opening a new credit card. Although a thorough investigation of your credit report may temporarily reduce your score, the additional lending capacity will outweigh the decrease, particularly as capacity is 30% weighted in determining your score.

3. Automate your payments
Some late payments are not an automatic score killer; however, if you are making late payments, you may want to start automating payments using online banking. Making payments on time is one of the most important factors in your score, so make it as easy as possible by setting up automatic payments.

4. Check your credit report
Make sure there are no incorrectly listed late payments and that the amount owed for each account is correct. If you find errors, dispute them with the credit department. You have three FICO credit scores, one for each of the three bureaus: Equifax, TransUnion, and Experian. You are entitled to a free report from each agency every 12 months. You can obtain your report online at annualcreditreport.com or by calling 877.322.8228.

Improving your credit takes time, but the financial benefits are high! If you want a free credit score analysis and to get personalized advice, then let’s begin.