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Finding yourself denied a loan for a home, vehicle, or another important purchase can feel discouraging. But even if you’re facing less than ideal interest rates or a blemished credit history, there are still practical steps you can take to strengthen your financial standing.

Fortunately, rebuilding your credit score is possible though it may require patience and commitment, the results are well worth the effort. If you’re ready to make positive changes, consider these effective strategies for boosting your credit score, starting today:

1. Get Your Credit Report and Dig In

IAA Credit Union members have access to a free credit report and score at any time through My Credit Score. Checking your credit information does not affect your score. It is recommended to request a credit report from bureaus such as Experian, Equifax, and TransUnion regularly to verify that there are no errors in individual reports. Individuals are entitled to one free copy of their credit report each week.

Review your credit report thoroughly, as about 20% contain errors. Report any inaccuracies you find, since mistakes can lower your score. The Federal Trade Commission has seen a rise in consumer-reported credit report errors.

2. Automate to Avoid Late Fees

Your credit score is largely based on your payment history, which accounts for about 40%. Scores range from 300 to 850; the higher the better. Here's the thing: Even one late payment on a credit card can lower your score by as much as 100 points. That's huge. That's why it' so important to pay your bills on time, or even early, ever single due date.

To make timely payments easier, consider setting up automatic bill pay through your bank’s online services this simple step can help ensure you never miss a due date. If you prefer a hands-on approach, use electronic calendar alerts on your phone, tablet, or computer to remind you a few days in advance. For those who favor traditional methods, marking your paper calendar with a brightly colored reminder or leaving a note in a prominent spot, like your bathroom mirror, can serve as an effective prompt. Choose the strategy that best fits your routine and stick with it consistent, on-time payments are a cornerstone of a strong credit score.

Pay Down Debt

Lenders prefer to see manageable balances on credit cards, as excessive debt may be concerning. Consider the following strategies:

• Reduce outstanding balances whenever possible.
• Avoid fully utilizing your available credit limit.

Holding a balance that exceeds 30% of your total credit limit can negatively impact lender perceptions. Ideally, maintain utilization between 10% and 30% of the credit available to you.

4. Use It or Lose It

If you don't use a credit card for over six months, your issuer might close the account, which could lower your credit score especially if it's your oldest card. To keep it active, make a small monthly purchase and pay it off right away.

5. Consider a Secured Credit Card

If an application for a traditional credit card is declined due to a low credit score or lack of credit history, an alternative is to consider a secured credit card. With this type of card, the cardholder provides a deposit to the financial institution, which typically serves as the credit limit. After a period of responsible use and payment, often between 18 and 24 months some secured cards may be converted to standard credit cards.

What's Next

By adopting these practical habits, you’ll be well on your way to building and maintaining a healthy credit profile. Whether you’re just starting out or looking to strengthen your financial footing, consistency and awareness are key. Remember, your credit journey is a marathon not a sprint and every smart decision brings you closer to your financial goals.

Originally published by SavvyMoney , adapted by IAA Credit Union.