Your personal credit score is your financial report card.  About 10 years ago, I really didn't know much about the importance about my credit score, but quickly learned when I went for an auto loan, my home loan and also credit cards.  The rates given offered to you could be influenced based upon your credit score or maybe the deciding factor of being accepted or declined.  If you ever plan on opening your own business soon or in the future, it is important for you to manage your credit score and at least know your score to take action towards improving it.  I have learned how to improve my credit score by using the 5 tips below and also monitor it in case anything changes or if suspiscious activities are being done with my finances.

For this week's "Friday Five", I am listing 5 ways to improve your credit score. 

1. Pay your bills on time:  Ok, this is a no brainer, but when we don't make paying our bills high on our list of priorities, they can sneak up on you and cause your score to go down.  Once a late payment is recorded, it may take some time for it to recover, so it is best to be proactive and to schedule automatic payments and to set aside time once a week to dedicate time to manage your bills.  I now use online banking and bill payments with my smart phone.  I also set up automatic payments to save me time as well as my credit score, but still double check to make sure the payments are made.
2. Don't max out your credit card:  If you have a limit of $5,000.00, having a high balance can reduce your score.  It is best to have you limit at aroun 20%-40%.  If have a high ratio, ask for a higher limit to lower your ratio and improve your credit.
3. Correct Mistakes:  When I first viewed my credit report, I noticed discreprancies on them and had negative marks on accounts I never even had.  It is important to see your credit report and to see if things are correct.  You can file for an audit from the credit reporting agencies on their websites and they will investigate if the negative records are accurate.
4. Don't close accounts that you don't use often:  Many people think that if they close out accounts they rarely use will help their credit score, it actually hurts you by changing your credit utilization.  Don't go out and start maxing these out as well, but keep the activity level the same if it is low and keep them open.
5. Be realistic about your negative marks:  If you have the severe negative marks on your credit score, be aware of them and realize that you have to ride the 7 year life of these marks.  Don't let these marks discourage you to let things get worse and not manage your credit.  Ensure that you do know what your score is and to improve it over time with patience and placing importance on your score and learn from your mistakes.

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