A strong credit score can save you thousands of dollars in interest over the life of a loan. Whether you're planning to apply for a mortgage, auto loan, or personal loan, improving your credit score should be a priority.

1. Review Your Credit Reports

Start by obtaining free copies of your credit reports from all three major credit bureaus (TransUnion, Experian, and Equifax). Carefully review them for:

• Errors in personal information
• Inaccurate account statuses
• Fraudulent accounts

Dispute any errors you find, as correcting mistakes can quickly boost your score.

2. Pay Down Credit Card Balances

Your credit utilization ratio (the amount of credit you're using compared to your available credit) significantly impacts your score. Aim to:

• Keep balances below 30% of your credit limits
• Pay down highest-interest cards first
• Avoid closing old accounts, as this reduces your available credit

3. Avoid New Credit Applications

Each hard inquiry from a credit application can temporarily lower your score. In the months before applying for a major loan:

• Avoid applying for new credit cards
• Space out loan applications
• Rate shopping for certain loans (like mortgages) within a short period counts as a single inquiry

4. Establish a Pattern of On-Time Payments

Payment history is the most significant factor in your credit score. To build positive history:

• Set up automatic payments for at least the minimum amount due
• Use calendar reminders for manual payments
• Contact lenders immediately if you anticipate difficulty making a payment

5. Diversify Your Credit Mix

Having different types of credit (installment loans and revolving credit) can positively impact your score. Consider:

• A small installment loan if you only have credit cards
• A secured credit card if you're building credit
• Becoming an authorized user on a family member's account

Improving your credit score takes time and discipline, but the financial benefits are well worth the effort.