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Improving your credit score offers opportunities for lower interest rates on loans and helps you become an easier applicant to approve for a loan or line of credit. Though it may take a few months to see a major improvement in your credit score, here are six steps you can take today that will set you on the path to better credit as well as establish positive financial habits.

1. Download your credit report.

Pull a copy of your credit report from each of the three major national credit bureaus: Equifax, Experian, and TransUnion. The Federal Trade Commission now offers a program that lets consumers check their credit reports from each of the agencies once a week for free. Visit AnnualCreditReport.com to request free copies of your credit reports.

2. Evaluate your credit score.

Review each bureau’s report to see what’s helping or hurting your score. Keep in mind that your actual credit score can defer between the different bureaus. Additionally, each financial institution can use different credit scoring systems to help them determine credit eligibility, such as FICO® Score and VantageScore®. Your credit score is broken down into weighted categories that impact your score differently. According to our credit bureau expert, Experian, the general categories that make up a FICO score include: Payment History (35%); Accounts Owed/Credit Utilization (30%); Length of Credit History (15%); Credit Mix (10%); and New Credit (10%). Various factors that may negatively impact your score include late payments, high credit card balances, too many new credit inquirers, or loans in collections. From here, we can start implementing better financial practices to help improve your score.

3. Adjust your credit usage.

A consumer best practice is to aim for credit usage that is 30% or less of your total credit limit. If you have a $1,000 credit limit, your outstanding balance should be $300 or less to stay within the 30% usage limit. You should also make an effort to pay your credit card usage off completely or as much as financially possible each month to lower your outstanding credit balance even more. Cut out unnecessary spending and be more mindful of the interest that accrues on your outstanding credit balance to help you establish a positive payment history and be more financially mindful.

4. Limit new credit inquiries.

A soft inquiry, like pre-approval offers, should not affect your score. Hard inquiries, however, will live on your credit score for up to two years. These inquiries include applications for new credit cards, auto loans, and mortgages. Having a few hard inquiries over a few years is normal, but too many inquiries can lead lenders to think a borrower is high-risk due to financial challenges. Avoid hard inquiries completely, if possible, when trying to improve your credit score.

5. Don’t close old accounts.

Keep your oldest credit accounts open, even if they are not used frequently, to help improve the age of your credit history and your credit utilization ratio. If you have delinquencies or collections accounts, work out a plan with the lender to get those paid off. Even though your history of late payments or charge-offs remains on your report for up to seven years, positive changes made today will only work to improve your score.

6. Consolidate high-interest debt.

If you find yourself with too much outstanding debt with high interest rates, consolidation can help. You'll decrease your number of monthly payments and can look for a more affordable interest rate to pay off the debt faster than if you made multiple payments to multiple lenders. Credit unions can be competitive debt consolidation lenders with lower loan rates than many traditional banks, helping you make affordable loan payments. First Harvest offers budget-friendly personal loans with terms up to 60 months as well as balance transfers for high-rate credit card debt.

Building and maintaining a positive credit score is an ongoing process, so it is never too late to start! Start implementing better financial practices and make positive credit changes today to put yourself on the path to an improved credit score and financial independence.