One of the biggest financial mistakes one can make is not taking their credit score seriously. The three-digit number has the ability to derail your dreams for the future. The credit score is one of the most crucial parameters that lenders rely on while deciding if it’s feasible to allow you to borrow money. A bad credit score reflects your inability to make sound financial decisions, and banks and other financial institutions might deny your loan application. But, even if you have a bad credit score, it shouldn’t stop you from trying to improve your credit score. Though this process will take time, the sooner you address the issue, the faster your credit scores will start improving.

There are several easy and effective steps that will help you redeem your financial health and improve your credit scores.

Pay all your bills on time
One of the major causes of bad credit score is your inability to pay your credit card bills on time. Lenders request your credit report before processing your loan request as they try to gauge how reliable you are at paying your bills. It is believed that the past payment performance can help them predict your future payment habits. So, even if you have a past record of not paying your credit bills on time, you should start making amends right away. Start paying all the bills on time as agreed every month. Though the records of late or missed payments might stay on your credit report for seven years, the impact of the same declines over time. This is because older payments have lesser effects on the credit report than the more recent ones.

Boost your credit score by making utility and cell phone payments
You can improve your bad credit scores with the help of a new, free platform called the Experian Boost. Through this platform, consumers can allow Experian to connect to their bank accounts to identify the utility and telecom payment history. Once the consumer verifies the data and confirms that they wish to add it to their Experian credit file, the updated FICO® Score is made accessible in real time. However, for this to work to your advantage, you need to ensure that you pay all the utility and cell phone bills on time.

Pay off the debt and maintain a low credit balance
Another important factor that has a major impact on your credit score is the credit utilization ratio. This is calculated by adding all your credit card balances at any given time. This total number is divided by your total credit limit. Usually, lenders prefer low ratios of 30 percent or less, and people with good credit scores have low credit utilization ratios. A low credit utilization ratio implies that you haven’t maxed out on your credit cards and can manage the credit well. So, to move toward a low credit utilization ratio, you need to keep paying off the debt and keep your credit card balance low at the same time.

Dispute any inaccuracies on your credit reports
There are instances when errors in the credit reports can affect your credit score. So, it is essential to check the credit reports from all the three credit monitoring bureaus—TransUnion, Equifax, and Experian— for errors. If you spot any inaccuracies, you can dispute the information and get it rectified right away.