There are many easy and effective ways to improve or maintain a good credit score. \n1. Pay all your bills on time\nAny payments more than 30 days after the due date are recorded as “delinquent” on your credit history; this will hurt your credit score.\nThat includes credit cards, phone, utilities, tax bills, etc.\nLate payments generally remain part of credit history for seven years—no matter how insignificant the amount is. That means it doesn’t matter if you are late on a $10 or a $10,000 payment. What stays on record is that you missed the payment.\nIf you are busy or sometimes forgetful, set up pre-authorized payments for all your bills.\n2. Keep your credit utilization below 35 per cent\nWhat does credit utilization mean?\nIt is the percentage of credit you are using compared to how much credit is available to you. If your credit card has a $1,000 credit limit and you currently have a balance of $500 due, then your utilization is 50 per cent ($500/$1,000).\nYour credit utilization should include all amounts you owe compared to those available for you to borrow. That means that if you have multiple credit cards, car loans, etc., then you have to add up all the balances of those loans and divide it by the total loan amounts.\nAs a general tip, when your bank offers you a credit limit increase, take it because it will lower your utilization rate (unless you think a higher limit will result in more spending).\n3. Be loyal to your credit card\nThe longer you’ve had the same credit card or loan, the better. If you are looking to close down a card, consider how many years you’ve held it for.\nYou’re better off closing the card you’ve had for two years than the one you’ve actively used for 10 years.\n4. Avoid unnecessary new debt\nEach time you apply for a new credit card or other loan accounts, it’s recorded in your credit report.\nA couple of inquiries a year won’t cause any red flags in your history, but if you apply for multiple credit cards in a short amount of time, lenders will view this negatively.\nSometimes it’s tempting to sign up for a new credit card with a limited-time promotion, but it could hurt your score in the end.\n5. A variety of credit is healthy\nCreditors like to see proof that you can handle multiple accounts of different loan types. A better credit score includes a mix of loan types and multiple stable accounts.\nA mortgage or car loan is a fixed amount meant to be paid down each month. Given that you don’t have the freedom to take out amounts already paid off, this is seen as a less risky loan.\nOn the other hand, a credit card can fluctuate—you might have the full amount paid off one month and utilize your entire credit limit the next—consequently, lenders will consider you a riskier investment. \nGetting on top of your credit doesn’t have to be daunting. If you follow these tips, you’ll get there in no time.\nKEEP THE CONVERSATION GOING\nDo you know what your credit score is? What steps have you taken to maintain or improve it? Post a comment below.\nDisclaimer\nThe views and opinions expressed in this article are those of the author and do not necessarily reflect that of CPA Canada.