You need to keep a close eye on your credit score because it can affect your life in surprisingly diverse ways. Besides the obvious, making it difficult to get loan approval, it can even sometimes affect you getting a new job. Many prospective employers now screen job applicants using credit reports based on the idea that someone with good credit will make a more responsible employee.

The bottom line is that poor credit can cost you both money and opportunities.

Whether your credit is great and you want to keep it that way or you need to start rebuilding poor credit, here are some easy tips:

1. It is obvious but very, very important: make sure that you pay your bills on time. The most important factor in determining your credit score is how you pay your bills, meaning whether you pay them at all - and if you do pay them whether you pay them on time.
2. Order a copy of your credit report at least once a year and carefully go through the contents. Everyone is entitled to one free credit report each year from each of the three credit reporting agencies. Annualcreditreport.com, the official site run by the agencies, is the best way to access your credit report for free, though these reports are without an actual credit score (which can only be obtained for a fee). The important thing is having the credit report itself, not the score, because the report is what is used to generate your credit score. So if you find any errors report them immediately to the credit bureau that you got the report from.
3. Don’t make the error of opening a lot of accounts within a short span, that is to say that there should be some time gaps between the openings of two credit card accounts for instance. Suddenly making a lot of credit available to yourself is bad for your score because it gives you the room to generate lots of debt quickly. This becomes especially important if you have a short credit history.
4. Do not open credit accounts that you do not need. Try to avoid opening that store credit card just to save 10% on your first purchase.
5. Make sure that your balances are always low when compared to your available credit. For example, if your total credit limit is $10,000, then your balances should be below about 25% of your credit limit - that is, you should owe no more than $2,500 total in order to help improve your credit score.
6. Don’t close paid-off credit cards. That’s right; do not close paid-off credit card accounts. It may sound crazy, but instead keep the account open and just stop using it. The reason for this relates to the last point: you want to keep your balances below 35% of your available credit and closing an account could prevent this. Let’s look at an example. If you have two credit cards with $5,000 limits and owe $2,500 on one card and nothing on the other card you are using 25% of your available credit – a very good ratio. This is because you have $10,000 in available credit and are using $2,500, or 25%. Now, if you close the paid-off card, you suddenly have only $5,000 in available credit but still owe $2,500 – meaning you are now using 50% of your available credit. This means closing the paid-off credit card actually hurt your score.
7. Get installment credit. Installment credit – a car loan or personal loan – is a great way to build credit and compliments revolving credit, like credit cards, leading to a higher overall credit score and a more complete credit history.
   

If you are reading this now not worried about having poor credit but instead trying to build a credit history, here are some tips to establish yourself:

1. Have a family member make you an authorized user of his or her credit card. This adds an entry into your credit score and works for minors too. A warning though, make sure the credit card has a clean history or your first credit report entry will be a negative one.
2. Open a checking or saving account if you do not have one already. Lenders often view these as a sign of financial stability.
3. Apply for a student credit card because they are usually fairly easy to get – but be smart using it! (They are easy to get because they often have very high interest rates.)
4. Apply for a store credit card.