Few financial figures are as important as a credit score. The three-digit figure has a major impact on daily life – dictating what you can buy, how much credit you can obtain and even where you live.

A credit score is an estimate of your credit risk, which is based on your credit report. Lenders use this number to determine how likely you’ll be to repay a loan or line of credit in a timely manner. The higher the score, the better interest rate you’ll receive.   

Here are some simple do’s and don’ts for managing your credit score and maintaining a positive credit history:

Don’t Miss Credit Card Payment Due Dates 

Credit card companies set deadlines in stone. Missing just one payment  can negatively impact your credit score. On the flip side, a history of on-time payments is one of the key factors in managing your credit score.

Do Pay More than the Minimum Amount Due 

Submitting minimum payments can be a very slow way to pick away at your credit card debt. Bigger payments can make a big impact on your total debt level, plus they can help raise that score.

Don’t Apply for New Credit 

If you are in credit rebuilding mode, applying for new credit could not only lower your rate, but you’re more likely to get higher interest rates on the loan or line of credit.

Do Decrease the Total Amount of Debt Owed 

Reducing your total debt, including credit cards and other personal loans, is among the fastest ways to improve your credit score.

Don’t Close Old Credit Card Accounts 

Closing a credit card can lower your credit score – especially if it’s been open for more than three years – because it reduces your credit-to-debt ratio, a major factor credit bureaus use to determine your score. If you want to remove the temptation to spend, consider cutting or storing the card while keeping the account open.

To keep tabs on your credit history and ensure the data is correct, check your credit report at least once a year. You can receive a free credit report annually from each of three credit bureaus at www.annualcreditreport.com.