If you have poor credit, there are things you can do to improve your credit score. Here are eight tips to help you repair your credit so that you will be able to get the loan you need when the time comes to buy a car, home, or other item. It can take some time to get your credit score where it needs to be, so it is best to start working on it right away. The worse your credit is, the longer it will take to repair it.

Tip #1: Reduce Credit Card Debt

If you have savings, use it to pay down your credit card balances. A big portion of your credit score is determined by the percentage of your available credit that is being used. If you have $10,000 in credit from various credit cards, your credit score will be higher if you have only used $1,000 or $2,000 of that credit than if you have used $8,000 or $9,000. Maxing out your credit cards will cause you to have a much lower credit score. To increase your score, pay down your credit card balances but leave the cards open and active.

Tip #2: Don’t Charge Too Much at Once

It looks bad if you run up 30% or more of a credit card’s balance in one month. If you must use a lot of credit in a short period of time, try to spread it out between several different credit cards.

Tip #3: Be Careful with Balance Transfers

Balance transfers can be great for saving money on interest. However, if you transfer your credit card balance to a card that has a lower credit limit, you could actually end up reducing your credit score because you are now using a higher percentage of your credit limit.

Tip #4: Keep Old Accounts Open

Old credit card accounts should not be closed. Instead, charge a small amount on each card every month and pay it off promptly when the bill arrives. This will create many on-time payments on your credit report, which will help to raise your credit score.

Tip #5: Correct Mistakes

Examine your credit report at least once per year to check for errors. If there is anything on your report that shouldn’t be, dispute the item and ask that it be removed. You should request copies of your report from all three major credit reporting agencies and dispute any errors you find.

Tip #6: Pay on Time

This is pretty obvious, but the more on-time payments you have on your report, the better. Even if your credit is very bad now, if you start making your payments on time, you will eventually have nothing but positives on your credit report. Each on-time payment helps get you a little closer to a good credit score.

Tip #7: Avoid Excessive Applications

When you apply for a lot of credit at once, it can damage your credit score. Instead of applying with multiple lenders for the same loan, compare rates and fees first and pick one to apply with. Don’t apply through any other lenders until you know whether you have been approved by the first.

Tip #8: Get a Bad Credit or Secured Credit Card

If the only card you qualify for is a bad credit or secured credit card, go ahead and apply for it. If used wisely, these cards can help you rebuild your credit. Every time you pay the bill on time, you will be adding another positive item to your credit report. These cards usually have very low limits, but once you have been using them for several months, you may find that you are able to get another card with a slightly higher limit.

If you want to experience financial security and success over the long term, one of the most important things you need to do is to develop a good credit rating. If you do not currently have a good rating, you should take steps to improve your credit score. You can look for firms or institutions that offer fast credit repair services, or you can learn the steps to improve your credit score yourself.

Many people do not understand what they need to do to improve their credit rating. In fact, there is no exact magic score that defines a good rating. There are some creditors who will look on you favorably if your credit score is above 650. Other creditors will want you to have a score above 700 before they will qualify you for a loan. If you know what your credit score is, then you can start taking steps to improve it.

People with average credit scores of around seven hundred are likely to be approved for most credit, but will not necessarily be offered the best interest rates. If you have a credit score that is rated as excellent, you will be able to save many thousands of dollars on your loans for your mortgage and your car.

Just what are the steps that will improve your credit score?

First you need to know what your score currently is. To do this you can look online for websites that will tell you your FICO score for free.

You will also need to see your credit report. The three agencies that report credit in the United States are all obliged by law to give consumers their credit report every year at no cost.

Carefully study your credit report and look for any mistakes in it. Some reports for example may list a loan as delinquent when in fact you paid it off in full. If you do come across any errors, contact the creditor to discuss getting the error fixed. This will improve your credit rating.

If you are carrying a lot of debt, keep working to pay it down. Too much debt can lower your FICO credit score. Also, be sure that you always pay your bills before they are due. Being even a day or two late in paying your bills can harm your credit rating.

Be cautious in the way you use your revolving debt. Don’t use up all the credit that is available to you on your credit cards. In addition, you should not ask for any new credit unless it is absolutely necessary. Having too much credit, especially revolving credit, is a signal that you are spending too much in relation to your income.

By taking all these steps you will eventually improve your credit score.

If your credit score is not where you’d like it to be, don’t despair. There are always things you can do to make it better. Here are five ways to improve your credit score.

#1: Know Your Credit Score

Get your free credit report online. Once you receive your free credit report, find things that might be affecting your score in a negative way, such as errors or delinquent items. You can contest these items, which could give your credit score a boost. Having a good record of your past transactions and payments is vital. If you do your banking online, you can check the payments you have made through online billing records. If you do not do your banking online, you should consider it. When you request your free credit report, be sure to go to the government website so you are not fooled or lured in by a site that claims to offer free services.

#2: Pay Future Bills on Time to Improve Your Credit Score

If you have gotten into debt, it can be hard to follow through and make your payments on time. If you are trying to climb out of the hole, making payments on time for a year can help straighten out your credit. Even if you have past late payments, making future ones on time will certainly help. If you have been with an institution or a service company like your phone or cable service provider for a long time, call their customer support people and see if there is a way to mark off one of the late payments. Most companies value their customers and in the current economic climate, many will work with you as a gesture of goodwill. It does not do them a service to take a hard line with their customers.

#3: Improve Your Credit by Paying Down Balances on Credit Cards

Credit cards are the cause or the root of many credit problems. Remember that closing your accounts and paying them off is a strike against your credit, so keep making payments if possible. If your account is active and the credit agencies see that you are making steady payments, it will bode well for boosting your credit score.

#4: Get E-mail or Text Reminders for Your Bills

If you cannot afford to set auto pay, get e-mail reminders through your financial institution and utility companies. Many banks and credit unions allow you to set up e-mail notifications to remind you when you are close to your credit limits or when your bills are coming due. If you have a smart phone, you can set up your phone to receive text or email messages when you get an email from your bank.

#5: Apply for New Loans and Credit Cards Carefully

This may seem like common sense, but it is indeed a double-edged sword. If you are trying to rebuild your credit, it helps to have a steady track record of payments made on time. Getting a small loan or a credit card with a small credit limit can help you with that. This is advisable only if you have been paying your bills, have your finances straightened out, and have your head above water. Be very careful and make sure that the terms are reasonable or you may end up in a worse situation than before.

About the author: Diane Johnson writes about a number of her interests including shopping, continuing education, and traveling.