Written by Spotloan

It’s February, which means that a few of our enthusiastic and well-intentioned new year’s resolutions may have started to fall to the wayside by now. After all, it’s hard to stick to a healthy diet when your kitchen’s full of leftover holiday cookies. We’re all human, and it’s normal to slip on a goal or resolution now and then. But there’s one that you should bring back to life: taking steps to improve your credit score.

A low credit score can be damaging to your financial health and can make it harder to get approved for personal loans, mortgages, and credit cards. Thankfully, we’re here to help. There are many steps you can take to improve your credit score and financial health, but some are more effective than others. If you’re just starting on your journey, you may want to consider doing a credit report review before moving on to our tried-and-true steps for improving your credit. You can read more about that process here.

Now that you’re ready, read on and get started on your journey to improving your financial future.

Five Actions You Can Take To Lower Your Credit Score

1) Enroll in auto-pay or set calendar reminders

One of the best things you can do for your credit score is to make sure you’re always paying your bills on time. Late payments can be catastrophic when it comes to credit scores. Paying late will not only drag your credit score down but it’ll also look like a red flag to any lenders pulling your score in the future. On the other hand, a history of timely payments is a good indicator that you’re financially responsible and trustworthy.

Setting your credit cards, mortgage, car payments, and insurance to automatically come out of your checking account the day they’re due (or the day before to account for processing times) is a great way to make sure your payments are on time without having to think too much about it. If you’re a fan of manual bill paying, set calendar reminders or alarms that alert you the day a bill is due and pay it as soon as it pops up.

2) Bring your credit card utilization down under 30 percent

Like on-time payments, your credit card utilization rate (credit you are using/credit you have available)  is another factor in determining your credit score that’s considered “high impact.” If possible, it’s good to focus on improving in high impact areas first since they’ll move the needle faster than medium and low impact factors. Crippling credit card debt is something that millions of Americans have to deal with each year, and it can be really difficult to get out of. Paying down your balances so that your utilization rating stays under 30 percent can work wonders for your credit score and it can potentially save you a fortune in interest payments, too.

This category might sound easier said than done, but there are lots of ways to drive your utilization down. Two things that could help to start are setting a budget and living within your means. From there, work on paying down your debts. This process will be different for everyone and can include methods like picking up extra hours at work, establishing a part-time income stream on the weekends like driving for Uber or walking dogs with Rover, self-publishing creative works through Amazon’s KDP program, etc. The opportunities are endless. Continue to throw all of your extra money at your credit card debt and then watch the debt fall and your score rise.

3) Keep your old credit cards open

Paying off a debt is exciting and inspiring! Your first instinct may be to close out the account and have one less on your credit report, but leaving it open may help your score. An open account with no balance directly affects two aspects of your credit score that we haven’t talked about yet: age of credit history and total accounts. These are considered to be medium and low impact, respectively, but every point counts when you’re trying to build your credit score. If there’s no annual fee, leave the account open so it can help your credit utilization, age of credit history, and total accounts.

4) Address negative remarks

Negative remarks from public records and collections companies can stay on your credit report for seven to 10 years. They can also sometimes be inaccurate. Check your credit reports at least once per year and if there’s something on your credit report that isn’t accurate, dispute it. You can do this right through free credit monitoring websites like Credit Karma, Credit Sesame, and Annual Credit Report. If an accurate derogatory remark has passed the seven-year mark and you’ve paid off the debt, you can request a “paid in full” document from the collections office to fax to the original creditor and request that they update the credit bureaus.

5) Keep hard inquiries to a minimum

Each time you apply for some kind of credit such as a Best Buy credit card, or even Apple Financing, the creditor has to pull your report. This results in a “hard inquiry” getting added to your report. Having too many hard inquiries on your credit report can hurt your score and can stay there for up to two years. The best way to avoid hard inquiry hits is to only apply for new credit accounts when you really need them. It can be detrimental to your credit score if you open accounts just to improve your credit mix or earn rewards, and it can also tempt you into overspending and bringing your credit card utilization rating right back up.