In the personal finance world, you are your credit score. If it’s blemished, life can be difficulty for you especially when you need financial assistance. Your credit rating can affect your ability to apply for products such as credit cards, loans and mortgages. No financial institution will assist you if your credit is that bad. You may know that already.

You either have a bad credit, good credit, or excellent credit. If you have a bad credit, there is no cause for alarm. The good news is, you can change that with better financial habits. Starting today, you can begin to improve your credit score by changing how you spend or choosing to spend less and still live a fulfilling life.

1. Improvement begins with your credit report.

Your credit report is probably the first thing you should critically look into. It includes a list of the accounts that are hurting your credit score. You can only change what you know is hurting you. What you should be looking for is everything on that report that needs improvement. In as much as you want to improve on your bad score, you should also make sure the report is up to date and accurately reflects your current circumstances. Errors can also hurt your credit rating. Take note of all financial commitments that need immediate attention.

2. Avoid choices that have negative impact on your credit rating. 

Making late payments on anything from your mortgage, credit card, personal loan or bills will mostly likely end up on your credit report. If you can, take care of financial commitments as soon as possible. Unpaid loans or bills will continue to worsen your current situation. If you can’t pay, don’t avoid those payment calls or letters from your creditors. Make arrangement with your financial institution and stick to a payment plan that works best for you.

3. Begin to pay your credit card

This could be unrealistic for most people, especially when you don’t have enough money to pay back on time. Reducing your overall debt should be your number priority. Cut down on your spending on items you can comfortably live without and use the money to pay your debts, loans, or unpaid credits. You can consider loans from a family member or friend.That doesn’t reduce what you owe, but it does move debt off your credit report and give your credit score a quick boost.

If all options to take care of your finances are failing and you still want to get help, you could consider loan with fixed interest rates – so you can budget knowing your repayments won’t ever change. But still plan well to make sure you can repay that as planned without missing a payment to fully benefit from that.

4. Stop applying for credit.

Don’t apply for credit if you know you are already in an uncomfortable financial situation. Sort out any problems on your credit file and improve your credit score for a period of time before you think about applying for more credit. This is probably a difficult decision for most people. But getting your credit score back to good or excellent should be your priority.

5. It pays to pay your bills automatically.

This strategy may seem extremely obvious to everyone but late payments are the most common piece of negative financial information that appear on your credit report and can result in significant drop in your credit score. As much as possible, try to get your bills paid through automatic deductions. If you can’t, use your bank’s online check system to make regular automatic payments. That way, all of your regular expenses can be taken care of on time.

The easiest and most straightforward thing you can do to protect your credit score (or begin improving it) is simply to pay your bills on time. It may not be that easy if you don’t have regular income or have recently lost your source of income. But considering that a bad credit can last as long as seven years, it’s worth it to keep it from dropping.

Most people who get into financial trouble often ignore the problems until they become huge legal battles. Pay what you can and work with your creditors. It’s a responsible approach and you will in the end save yourself the trouble of trying to dig yourself out a really bad credit score.