Your FICO score is what your lenders check to know whether they can trust you to repay on time when they lend you money. This score can be for any financial transaction, including a mortgage, car loan, credit card, and other lines of credit.

If your FICO scores are low, you may be wondering how to improve them. The first step to improving your scores is to understand how the FICO scores are calculated. Then, we will take a look at some essential tips on how to improve a bad credit score.

Your FICO score is calculated with the help of the following information about you:

• Credit history
  A FICO score takes into account your credit history. Longer credit history can mean a better credit score, but a short credit history may also work just fine if you maintain the other aspects of finance.
• Debt
  This makes up for a large portion of your credit score. If your balances are too close to your credit limits, it makes you seem like a risky borrower.
• Credit mix
  If you’re wondering how to improve a bad credit score, it can be achieved by having a healthy mix of credit. This means that your debt should preferably be a mix of different types of loans and not just one loan. This mix can include a student loan, a mortgage, and a car loan.
• New credit
  Avoid getting new credit cards one after the other as this will lower your FICO score. Only keep the cards you need and stay away from the others, even if the deals seem too good to ignore. You might be tempted with offers to open new accounts, but remember that those new member points can put you in bad debt.

Now that we know what parameters are used to calculate your FICO score, let’s look at the important answers to the question of “how to improve a bad credit score?”.

Tips on improving your credit score
According to the credit bureau Experian, you can improve a bad credit score by:

• Making your utility payments on time
• Keeping balances low on your credit cards
• Setting up automatic payments so that you do not miss out on payments on the due dates
• Bringing past due payments current as soon as you can
• Not opening new lines of credit until you need them
• Avoiding the closure of credit cards that you do not use
• Regularly checking with all credit bureaus about your credit score and the details in the report
• Disputing any irregularities in your credit report like incorrect personal information or accounts that should not be reported
• Working toward managing a good credit utilization ratio

These are some handy tips on how to improve a bad credit score. Remember that a good credit score can go a long way in ensuring financial stability and freedom in the long run.