Boosting your credit score can save you money. Your credit score is a number based on how well you pay back loans on time, sometimes called a FICO score. The higher the score, the less risky you are. The 3 players are Experian, Equifax and TransUnion.

Your goal is to get above 620. That’s the line for creditors. If you are below 600, banks won’t loan you money. In fact, if your mom knew your credit score was that low, she wouldn’t let you borrow any money, either. If you can get the score above 700, you get low rates. If you can eek out above 760, you can usually get the lowest rates. Perfect score is 850. Average score is 723.

Under the Fair and Accurate Credit Transactions Act, you can obtain one annual free copy of your credit report. For more information visit www.annualcreditreport.com or call 877-322-8228. But you will still have to pay a fee to get your actual score. Huh? They’ll give you your credit history, but the actual number, well, they can charge you $6 for.

Here’s the deal. You can get one free credit report (no credit score number) from each of the 3 reporting agencies listed above. But, you can only do this once a year. So, I spaced my requests out every 4 months instead of getting all 3 at once. That way I can note changes. Just an idea.

Without further ado, here are the top 5 tips for improving your credit score:

1. Pay your bills on time. If you pay late, then your bill shows up in a special area called “Adverse Accounts” and it lists what month you were late and how late you were. Think its OK, it only happened 3 years ago. . .wrong. They keep the list for 7 years. Yes, seven. Paying your bills on time can raise your score as much as 20 points just in one month.
2. Keep you credit card balances low. Maxing out your credit cards can lower your credit score by 70 points.
3. Don’t open any credit cards you don’t need. New accounts lower your credit score by an average of 10 points.
4. Have credit cards. Yes, you must have an installment type loan and its OK. Just pay it on time. If you have no credit cards or no installment loans, you tend to be a higher risk.
5. Closed accounts don’t go away. Believe me. I just checked my credit report and some old stuff is still on there. Real old stuff.

Hope this information helped you get your bills in order.