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Do you know your credit score? Not knowing about your credit could expose you to higher interest rates. Higher rates mean less money in your pocket at the end of the day. When applying for credit, your score helps lenders determine whether or not you are able to repay the loan based on your financial performance. While there are no tricks or quick fixes to get a good score, there are some steps you can take now. Here are four things you can do to improve your credit score.

Pay your bills on time. If you have a history of paying your bills on time, you’ll have an easier time getting a mortgage loan, car loan, or credit cards. Even if you’ve had serious delinquencies in the past, a recent history (24 months) of on-time payments carries weight in credit decisions.

Pay down debt.
Consolidating your credit card debt or spreading it over multiple cards will not improve your score in the long run. The most effective way to improve your credit is by slowly paying down the amount you owe.

Don’t open multiple accounts too quickly, especially if you have a short credit history. This can look risky because you are taking on a lot of possible debt. New accounts will also lower the average age of your existing accounts which is something that your credit score also considers.

Don’t close an account to remove it from your record. A closed account will still show up on your credit report. In fact, closing accounts can sometimes hurt your score unless you also pay down your debt at the same time.

These ideas won’t create a dramatic improvement in your credit score overnight, but over time, they will. Remember, it takes time to develop a strong credit score. Once you’ve done it, you’ll find it easier to apply for credit with favorable interest rates.

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