In recent months, there has been a spotlight on the credit scores of Americans. What used to be a decent score is now no longer cutting it for most lenders, many of which are looking for a score of 720 or higher. More people are looking for ways to improve their credit scores before they buy or refinance a home or make other big ticket purchases. If your credit score isn’t as good as it could be, here are 5 easy steps you can take to up your score and benefit from better lending rates:

Get Your Payments in On Time – Every Time
Your history of payments is one of the most important parts of the good credit score equation. In fact, how well you make your payments makes up about 35% of your total credit score. If you are consistently late or even miss a payment one month, you can lower your credit score by 100 points or more. Stay organized about what you owe and when it is due and get your payments in on time. You may want to set up automatic payments if you are prone to forgetting.

Stop Spending and Eliminate Your Debts
Any lender will be interested in the amount of debt you have compared to your total credit limits. If you work to pay down balances, it will give you a bit of breathing room and improve your overall credit score. Charge less on your cards and switch over to using cash more often, especially if you plan to purchase a home or car in the near future. Essentially, the more debt you manage to pay off, the better your credit will look.

Avoid Bankruptcy
When you file bankruptcy, you can destroy your credit history and score for 10 years to come. Bankruptcy is viewed to be worse the collections and delinquent accounts. Most lenders will run the other way from consumers with bankruptcy on their history, unless they are offering high interest loans. If you are headed towards bankruptcy, consider your other alternatives, including credit counseling, debt settlement, or simply strictly budgeting your income to pay down the debt on your own accord. Know that bankruptcy is not free and may end up costing you more than you can afford anyway.

Seek Assistance
There is certainly no shame in asking for help. If you are overloaded in debt or can figure out a sure-fire way to get a handle on your budget, seek assistance from a non-profit credit counselor who can help you explore your options for paying off debts. Some services can help you negotiate with your  creditors (a step you can also do on your own for free) to reduce your interest rates, making your payments more manageable. When you see yourself heading towards trouble, do something about it. Don’t let it go too far before you ask for help.

Don’t Close Out Old Accounts
While it may seem logical to close accounts you are not using, the move can actually hurt your credit rating. Closing accounts will lower the total amount of credit that is available to you. It can be especially harmful if you close one of you oldest accounts because it can make your credit history much shorter in length than it really is.

Improving your credit report is not impossible but it will not happen overnight either. If you take the following steps and commit to working towards improving your credit score, you can soon see a marked difference in score improvement.