Tip 1: Pay your bills on time
35% of your credit score depends on your history of paying bills, and the most recent five years has more weight than in prior years, so start paying your bills. Automatic payment is an easy way to make sure your bills get paid on time. Plus you don't need any stamps!

Tip 2: Pay off your debts
Your score goes higher as your total amount in debt goes down. And yes, your credit cards are part of this debt. So get on a payment plan to pay them off, especially if you're planning on applying for a home, a new car, or other major purchase.

Tip 3: Don't close your accounts
You'd think that once you pay off your credit card bills you should close the account, right? Wrong! Closing accounts that you've paid off only lowers your total available credit, can shorten your credit history, and can lower your overall credit rating. So pay those cards off and cut them up, but don't close the account.

Tip 4: If you can't pay them - consolidate them
If you can barely afford to pay your bills, and you own your home, you can most likely lower your monthly bills by getting a home equity loan, which uses the equity you've built up in your house (the value of your home minus the amount you still owe on the mortgage). Home equity loans usually have much lower rates than credit cards, so you can pay all of your bills off with the loan and then pay off the loan over time at a monthly amount you can afford. You will also probably have extra cash each month. You can calculate your monthly savings with our Debt Consolidation Calculator.

Tip 5: Fix errors on your credit report
Request a copy of your credit report from each of the three major credit bureaus listed below, and go over them carefully. If you see any mistakes, contact the bureaus and ask them to investigate. Your credit report is how companies decide if they want to loan you money – make sure it's accurate!

Equifax
www.equifax.com

Experian
www.experian.com

TransUnion
www.transunion.com

Tip 6: Avoid bankruptcy
There's been a lot of talk about how filing for bankruptcy lets you start with a clean slate, but it's not all true. A bankruptcy stays on your credit history for 10 years, and can lower your credit rating by hundreds of points. If you can avoid it, don't file for bankruptcy.