Your credit score is vitally important in nearly every financial decision you make − applying for a credit card, obtaining a mortgage, buying insurance or even signing up for a phone plan. Your credit score gives lenders an idea about how much risk they will incur if they loan you money. The lower your credit score, the higher interest rate you will be charged on your credit cards and mortgages. Knowing your credit score is important to making informed financial decisions. There are a number of ways you can improve your credit, but first you must know your score.

The credit report you obtain from Experian will include a lot of information, however the important number is your credit score. Credit scores range from 300-850. In general, a credit score above 700 is considered good. A good credit score will enable you to get favorable rates on credit cards, loans, and insurance. If your score is below 700, your options are more limited, and you should make it a priority to take active steps towards improving this score.

• Always make sure you spend something on your credit card each month, and always pay off your entire balance in full each month. Your credit score depends on how reliably you pay back what you owe, not on how much pay back, so even repaying a small credit card bill each month makes a huge difference.
• Always make your payments on time and in full. Late payments in recent months hurt your score more than late payments further back.
• Avoid charging more than 30% of your card´s limit in any given month. Having a high outstanding balance is in relation to your available credit will hurt your score.
• Avoid closing accounts or canceling credit cards that have had for a long time. The longer your positive credit track record, the better your credit will be. By canceling these cards or accounts, you effectively shorten your credit track record. Instead of canceling, just keep those cards inactive in a safe place, or keep your account open, so long as there are no inactivity fees associated with your accounts.
• Limit the number of times you apply for a loan, credit card, or cell phone. Your score could be negatively affected when companies pull up your credit report. Your score is unaffected, however, when companies pull up your score for prescreened offers and credit cards sent out through the mail.
• Never ignore overdue bills.