Your credit score is a vital component of financial health. A lower credit score can impact your chances of getting good interest rates while borrowing. Keeping this concern in mind, here are 5 key tips to improve a bad credit score.

Enter Payment Dates in Your Calendar
Late payments can negatively impact your credit score. So, avoid this by setting up reminders for paying your bills on time. Paying your bills on time even for a few months could take your credit score up considerably.

Inspect Your Credit Report
Your credit report holds your credit score. Now, these credit reports could have discrepancies or old information that need to be updated. So, make sure to ask for a copy of your credit report at any other credit bureaus so that you can spot mistakes and get them rectified. 

Avoid Closing Older Cards
You might have an old credit card that you might hardly or never use. Yet, even an unused credit card is marked in your credit report. So, avoid closing down any unused credit cards if possible, as doing so while negatively affect your credit score. This is one of the simplest tips to avoid getting a bad credit score.

Avoid Applying for New Cards
One of the best ways to bring up a credit score is to avoid applying for any new credit, unless it’s urgent. For instance, if you have to buy a car where the expense is huge, then you cannot avoid taking a new credit card. But if it’ s for a smaller expense, let’s say a new phone, then it is best advised to avoid applying for a new credit card. Applying for a new credit card frequently will result in your credit score getting impacted. 

Pay the Bigger Bills First
A high credit utilization rate will harm your credit score. So, to give a boost to your credit score, one of the best ways is to lower your credit utilization ratio. An easy way to do this is by paying off credit cards that are maxed out first before the others. This is one of the most effective tips to improve a bad credit score.

Take on Additional Credit 
This point may sound contradictory as the usual assumption is that one needs to use less credit to build a good score. However, 10% of your credit score is calculated based on a well-balanced mix of loans that includes student loans, auto finance, credit cards, and mortgage. So, as long as you regularly pay your bills, having more credit accounts can prove beneficial. Some financial experts even recommend taking small loans of around $1000 and paying it off on time to build your credit score.