For many people, the magical number is 760. This is the credit score where you are most likely to receive the best interest rates on a line of credit or a mortgage. Even if you are looking to rent a home or apartment, as opposed to buying, it will be difficult to obtain decent housing if your credit score is below 650 – despite what your annual income might be. For some individuals, their ability to maintain employment will be affected by their credit score. Smart credit habits and time will be the two elements that will most dramatically improve your score; however, there are several steps you can begin doing now to improve your score.

Have any errors on your credit report corrected.

Your credit report should be reviewed regularly to ensure that it does not contain any errors. According to recent data from the FTC, nearly 5% of American adults have had an error on at least one credit report from the three primary bureaus. Common types of errors including mixing up your report with someone who has a similar name, close accounts falsely reported as still open, and identity theft. Should you find any errors on your report, a dispute should be filed with the bureau that issued the report.

Pay smartly.

Are you paying your bills (including credit card bills) on time? Delinquent payments will be recorded on your credit history, and your payment history is the highest contributing factor to calculating your credit score. On average, a late payment will remain on your credit history for up to seven years.

For most adults, the simplest method of ensuring that their bills are paid on time is to place all of their bills on an automatic payment plan. However, if finances are tight, and you are living from paycheck to paycheck, be wise about staggering your bills throughout the month, which will enable you to avoid any expensive overdraft fees.

Similarly, if you have any outstanding bills that have not yet been sent to collections, these should be paid first. If you’re a couple of months behind on a credit card bill, or a few weeks behind on your utilities, make it a priority to pay these bills first. Payments that are one or two months late are not going to affect your credit score as drastically as payments that are three or four months late. As time passes, one or two late payments will have much less of an impact on your credit score.

If you do have accounts that are in collections, pay what you owe. It is better late than never.

Reduce the amount of credit you are using.

Credit utilization is defined as how much of the credit you have available that you are currently using, and this factor considerably contributes to the calculation of your credit score. Credit utilization is calculated by the balances of all lines of credit that you have and dividing it by your total borrowing power. Why does this matter so much? A lender wants to ensure that you are not utilizing so much of your borrowing power that it will become difficult for you to pay everything back. Financial experts recommend keeping your borrowing power under 30%.

If you need to improve your credit utilization, don’t reduce your credit limit or close any of your current credit cards. This increases your credit utilization by reducing your overall borrowing power.

Likewise, if you need to pay down balances quickly, you can consider using some of your cash reserves. At the same time, you need to ensure that you have enough cash reserves on hand that you won’t have to dip into your credit again if an emergency should arise in the next month or two.

Don’t close any of your current accounts.

Credit age is defined as how long your credit accounts have been open, and it does have a fair amount of impact on your overall credit score. Generally, most lenders want to see that you have a minimum of three open lines of credit and that you are current on your payments for each one. The longer an account in good standing has been open, the better off you will be. Allowing these accounts to remain open improves your credit age and assists with credit utilization.

Banish the temptation to open any new lines of credit.

It is a little known fact that your credit score can be harmed by shopping for car loans, mortgages, and credit cards. Any credit inquiries that have happened with the last 24 months are going to matter – a lot. During the time in which you are trying to improve your credit score, don’t search for any new lines of credit.

Keep striving forward.

Improving your credit score drastically will take time, but following these small steps will help you accomplish your goals. Don’t be discouraged. Keep reading and educating yourself. The more you know, the higher your credit score will be.