Of all the trouble-free ways to save money, improving your credit score is perhaps the most important. From home loans and car loans to credit cards and auto insurance, a good credit score can save you a lot of money over the years. Over a lifetime, the savings can easily reach tens of thousands of dollars.  People with great credit scores can actually get lower interest rates on car loans.

If you have a low credit score don’t be fooled by the “pre-approved” offers you get in the mail.  These offers are VERY easy to take advantage of, but more often than not they are taking advantage of you!  Some of those have interest rates over 50%!

Here are a couple of tips for improving your credit score:

Take These Steps to Improve Your Credit Score

• Pay your bills on time.  If you are 1 day late with your bills they can report this to the credit agencies.  A great way to make sure you are paying on time is to set up automatic payments. (see below for a cash back option)
• Keep balances low on credit cards and other revolving credit accounts like store credit cards.  Only use store cards if you can pay them off right away.  I have a Kohl’s card so that I can get 30% off, but whenever I use it it’s only for something that I can afford to buy without the card, and I pay it right off.
• Apply for and open new credit accounts only as needed. We’ve all been there, a huge car repair bill, a medical bill, etc… those are times when getting a credit card night be needed.  Just remember to pay them off as quickly as possible.
• Before buying something on credit ask yourself if it is absolutely something you need!  Do you really need that new TV?
• Pay off debt rather than moving it around.  Who hasn’t ever had to do this? Sometimes there are easier ways.  Set a budget, call your creditors and talk to them. Don’t just pay off one bill with another.  I have found in my life with a child with lots of medical issues, that it’s a lot easier and cheaper to negotiate medical bills with the doctor’s office, rather than putting it on a higher rate credit card.  It doesn’t hurt to ask, right?

Be sure to teach your kids about using credit wisely!

If you have good credit, there are a several of cash-back credit cards that pay up to 5 percent on purchases or even give you points toward travel. It’s vital however, to use the card only for monthly bills and everyday expenses, not to charge things you don’t need. You can put monthly bills that accept credit cards on automatic payment, and use the card for everyday purchases such as groceries and gas.  If you go this route make sure you are paying off your card every month. It would be horrible to mess your credit up by accident when you’ve been working so hard on it!