At the moment, about 30 million credit card users in the United States have low credit score (below 620). Low numbers in the credit score sheets means slimmer chances for them to obtain loans or get credit cards with lower interest rates. The credit score system is used by lenders to assess the credit-worthiness of a borrower. It is composed of 3 numbers ranging from a low 300 to a high 850.

Lending companies looks at an applicant’s credit score to determine his ability to repay the loan. Insurance companies, employment firms and even landlords also use this system to check an applicants paying capacity. A high credit score can also get lower interest rates on credit cards, mortgages or auto loans. If you are behind your bill payments, then it will definitely put a dent in your credit score.

You will want to clear up this problem to attain better a better credit standing. Here are some useful tips to clean up your credit record and improve your score.

Don’t Fall Back in Bill Payments

Be sure to settle all bill payments on time. 35 percent of your total credit score depends on your payment history. Paying bills on time will dramatically boost your credit rating.

In contrast, payment backlogs can severely pull down your score by 50 to 100 points. A single month’s delay in all your bill payments can lower your score from a commendable 710 to an appalling 563 to 633. Log on to Bankrate.com and let their simulator analyze your credit score.

One sure way to avoid late bill payments is to put them on automatic payment mode. Payments will be taken directly from your checking account and sent to your lenders and utilities provider.

Start Paying off Your Debts

It will make a nice impression to lenders if there is a wide margin between your credit card debt and your credit limit. Paying off more of your debts will create a wider safety net that will eventually improve your score.

Use Cash More Often

Charging everything to your credit card will only add more burden to your debt payments. If you are planning to apply for other credit account or loan in the future, it will be wise to pay off your debts and use cash months in advance.

Leave Your Old Credit Accounts Open

Closing down old or paid-off credit accounts narrows the gap between your card balance and your credit limit. This will make your balance appear larger than it is and will lower your credit score.

Seek Help from Credit Counseling Services

Being saddled with debts involving high interest will eventually cause you to miss your payments. Before this happens, seek help from non-profit agencies like Consumer Credit Counseling Services to set up a workable plan for debt repayment. These agencies will negotiate with your creditors to lower their interest rates and help you settle your debts in a short period of time.

Don’t File for Bankruptcy – Yet

Bankruptcy can easily push back your score by 200 points. When your score goes below 620 because of bankruptcy, credit will be hard to come by and interest rates will rise.

Always keep track of your credit score. Being aware of your score will help motivate you to settle all your pending bills and, in the long run, put you in a much better credit standing.