Before we begin talking about how to improve your credit score, you may be wondering what is a credit score?

Credit scores reflect credit payment patterns over time with more emphasis on recent information. In other words, your credit score indicates how financially trustworthy a consumer is and how probable it is you’ll pay your debts.

Your credit score is determined by five main criteria:

• Payment history (35 percent)
• Credit Utilization (30 percent)
• Length of credit history (15 percent)
• Types of credit (10 percent)
• New credit (10 percent)

How to Improve Credit Score With These 9 Credit Tips

What is the information used for?

Credit scores, or credit reports, are a major factor in determining your eligibility to qualify for loans, what interest rates you will be charged, your ability to rent an apartment or house, and your ability to get a job.

While some creditors define their own credit score ranges, below are the average credit score ranges, according to Credit Sesame:

• Excellent: 750 and above
• Good: 700 to 749
• Fair: 650 to 699
• Poor: 550 to 649
• Bad: 550 and below.

Increasing your credit score

To improve your credit score, consider the following:

• Pay Bills on Time:

You always want to make your payments on time because delinquent payments and collections can have a major negative impact on your score.

• Keep Credit Card Balances Low:

High outstanding debt can affect a score.

• Stop Opening New Accounts:

You should do this only as needed. Do not open accounts just to have a better credit mix because this will probably not raise your score.

• Pay Off Debt:

Instead of moving your debt around, pay down your debt as quickly as possible. Also, do not close unused cards as a short-term strategy to raise your score. Owing the same amount but having fewer open accounts may not lower your score.

• Order a Copy of Your Credit Report:

You are entitled to order a free copy of your credit report from all three credit bureaus once a year. You can order your credit report through AnnualCreditReport.com.

• Review a Credit Report Regularly:

You should do this so you know what is being reported. It will not affect your score to request and check your own credit report.

• FICO Score:

First, Payment History makes up 35 percent of your FICO score.

Second, how much you owe compared to how much credit you have available accounts for 30 percent.

Third, how long you have had credit makes up 15 percent. Typically, the longer you have had credit, the better you will score in this category.

Fourth, the types of credit you use accounts for 10 percent. Having a mix of credit cards and installment loans, like a car or mortgage, can help you.

Fifth, Credit Inquiries make up 10 percent. Each time you apply for credit, the lender will pull your credit (called an inquiry). Each inquiry can lower your FICO score, so try to keep the number of inquiries to a minimum.

• Dispute Any Errors Immediately:

Under the Fair Credit Reporting Act, you have the right to add a statement or comment in the event you wish to clarify some information on your credit report. If you have a negative item on your report, you may want to explain the reason to avoid having to repeat yourself to each potential lender. Creditors are given 30 days to respond to the dispute.

• Calculate Debt-To-Credit Ratio:

Each time you run your credit report (annually), write down a list of all of your open accounts and/or accounts with balances, including the name of each creditor, balance, and credit limit. Take the total of your balances and divide that number into the total of your credit limits. You want to see this number at 30 percent or less.