A credit rating, also called a credit score, is one of the main keys to a person’s financial life. Credit ratings are expressed as a three-digit number, ranging from 350 to 850. Whenever a person tries to obtain a loan or to get additional credit, his or her credit rating is first reviewed. This makes it essential to maintain and improve one’s credit score whenever possible. There are several simple techniques that a person can use to improve his credit rating, most of which involve correcting reporting errors and past mistakes.

It is advisable, first and foremost, for everyone to have at least a rough idea of what his credit rating is and what appears on his credit report. Careful credit monitoring has saved many people from the onerous consequences of identity theft. In the United States, federal law entitles every person to receive a free copy of his credit report every 12 months, from each of the three credit reporting agencies. Receiving these reports and reviewing them carefully makes it easier to spot errors or see what may improve one’s score.

One of the surest and most important ways to improve a credit rating is to pay bills on time. A person who reliably makes payments on his debt looks like a much lower risk to credit reporting agencies, as well as to lenders. One must also be careful to limit credit card charges to 30% or less of a card’s limit, and to make sure that these limits are noted accurately on a credit report. For example, a person may charge $1,500 US Dollars (USD) per month on a card with a credit limit of $5,000 USD. But, if a credit reporting agency believes that the credit limit is $1,500 USD, this will negatively impact a person’s credit rating, since it appears as if that person routinely maxes out that card.

Another way to improve a credit rating is to clean up past mistakes that can otherwise drag on a credit score. One example might be a person who in the last year has made a late payment on a loan or credit card. If that person has been a good customer otherwise, the lender may agree to simply erase the late payment from the person’s record. These requests must be made in writing and are more likely to be granted, the better a person’s credit is to begin with.

There are also things to be aware of and avoid, that may seem harmless, but look like risky behavior on a credit report. For example, having several credit cards at once which are relatively new may appear as if one is preparing to live beyond his means. While having several cards with a good payment history can be a positive thing for one’s credit rating, it should be done prudently over time.