Credit scores can feel like a bit of a mystery. You’re not entirely sure what your credit score is or how it’s calculated, but you know that you want to have a good one. If you want to know the basics of credit scores, you should read ahead.

What Is a Credit Score?

A credit score is a number that shows your creditworthiness to lenders. If you have a number on the higher end of the scale, you’ve proven over the years that you’re a reliable borrower. If you have a number on the lower end, you’ve shown that you’re a high-risk borrower who might not make their credit payments on-time.

What’s Wrong with a Low Score?

Credit scores are often lumped into categories like “excellent,” “very good,” “good,” “fair,” and “poor.” Typically, the “poor” category is for scores between 600 and 300.

While a low score is not the end of the world, it comes with some challenges. A low score affects your ability to take on more credit in the future, whether that means a mortgage, a business loan or a credit card. One of the biggest side-effects of bad credit is that things can get more expensive for you: you get higher interest rates, higher insurance premiums and higher security deposits.

Can You Improve Your Score?

The good news is that your score isn’t set in stone. You can change it. So, if you’re disappointed that your credit report shows that your score is far from “excellent,” you have the power to push it further up. These are some ways that you can improve it over time:

Diversify Your Credit

Credit mix is an element that determines your credit score. For a higher number, you should have a variety of accounts. If you only have credit cards or installment loans sitting on your report, you should think about applying for a Line of Credit offered through CreditFresh to immediately diversify your credit and potentially give yourself the opportunity to improve your credit history. It’s easy to apply for a line of credit. You can do the entire application online and hear about your approval quickly.

Pay Your Bills On-Time

Late and unpaid bills damage your total score. So, one of the easiest ways to improve it is to make a habit of paying your bills on time, every single time.

If you’re having trouble keeping track of the due dates for your bills, you should automate your payments through your bank. That way, the bill always gets paid — even when you forget about it.

Don’t Open Too Many Accounts

Be patient when it comes to opening new credit accounts. Why? Applying for new credit requires a hard inquiry — this can deduct points from your score. Applying for numerous accounts in a short amount of time is going to make your score take a significant dip. So, try to space out your applications.

It can also make repayments a little more challenging. Since you have more to manage, you will have to try harder to track your balances and make payments on time. You don’t want to bite off more than you can chew.

Don’t get discouraged when you see that your credit score isn’t as high as you’d like it to be. When you follow these tips, you can bring it up the ranks.