You need to try to improve your credit score so that you can get the best loan and credit card deals available out there. You should also realize that nowadays a bad credit score can also affect the rates on your credit cards, car loans and insurance premiums, as well as your ability to get a job, rent an apartment or take out a cell-phone contract.

Most consumers seem to think that their bad credit will clean up over time. While this is true to some extent, what happens if you need to get approved for a loan or a new line of credit somewhere before time has taken its course? The answer is that you either do not get approved, or you end up getting approved but at a much higher rate of interest that you would have had to pay if you had taken steps to clean up your credit score yourself.

Despite the importance, people tend to make big mistakes when trying to improve their credit scores. Here are 7 easy steps you can take to raise your score.

Fix your credit report
The fastest way to boost your score is to fix mistakes on your credit report. Go to Free Credit Score to get a free report from each of the three credit bureaus frequently. It’s important to fix errors on all 3 credit reports. You have a separate credit score based on each bureau’s report, so your scores could be very different if one report has errors.

Mortgage lenders usually get all three scores and use the middle one. Other lenders and businesses may only use the score based on one bureau’s report. If you’re about to take out a mortgage very soon, see if your lender can get your credit record fixed quickly. Credit bureaus generally have up to thirty days to investigate disputes with consumers, but some lenders work with special services that can get credit reports fixed in as little as 36 to 72 hours.

Pay your bills on time
About one-third of your credit score is based on your payment history. If you’re not able to pay the total balance, pay as much as you can by the deadline. Making that deadline is more important to your score than the amount you pay (although the more you pay off, the less interest you’ll owe). If you do miss the deadline, pay up as soon as possible, the later you are, the more you’ll hurt your score.

Keep your balances low
Another big part of your score is the share of available credit you’ve used. Lenders get worried if it looks like you’re maxing out your credit cards. Keep card balances below 25 percent of the credit limit, ten percent is even better. It’s the amount you charge that counts, even if you fully pay the balance every month.

Pay off old debts
Even a disputed electric bill or a small library fine can hurt your credit score if the debt goes into collection, dropping a high score by as much as 100 points. Even if you pay off the bill after it’s gone to collection, the damage is already done. Negative information generally remains on your credit history for up to seven years, but the impact on your score lessens through time. Don’t lose track of small charges that can come back to haunt you, and pay off the bills quickly before your score suffers.

Don’t close old accounts
Keeping old accounts with a good record can help because the age of your oldest card and the average age of your cards are key elements of your score. Closing accounts also lowers your overall credit limits, which makes it look like you’re closer to maxing out your available credit. If you do want to close some accounts, especially ones with high annual fees, close only one every few months and don’t close any accounts within 6 months of applying for a loan.

Don’t ignore your score
Buying or refinancing a house is the biggest reason to be concerned about your credit score. But your score also affects your credit card rates and terms, car loan rates and auto and homeowners insurance premiums. Insurers found that people who have low scores are more likely to have insurance claims, and your score can have a big impact on your premiums in most states. Landlords and potential employers may also check your record. Don’t worry about micromanaging your score; you’ll usually look good with anything above the high 700s. But your score can affect your personal finances at any time.

Order your credit score
You can’t get your score for free, but you can order it when you get a free copy of your credit report at Free Credit Scores. Some credit bureaus also offer their own versions of credit scores, which can give you a general idea of how your record stacks up, but most lenders use the FICO score when setting your rates.

If you are interested in improving your credit score and getting your free credit report visit: Credit Score.