There are a lot of Americans that have imperfections on their credit reports. They can be attributed to a lot of things, ranging from missed payments and defaults to having excessive credit and applying for too much credit. Do not worry, because there are ways to boost your credit score.

Before you can fix your credit, you should have a basic understanding what is a credit score is. Your credit score is a combination of many pieces of information, primarily your payment history and your outstanding debt, that is calculated into a number between 300 and 850. These calculations are based upon formulas and algorithms used by the three main credit bureaus.

Anything above 700 is considered to be a good. Very few Americans have a perfect score of 850 or an exceedingly low score of 300. Instead, the average American has a score around 680. Most people will not have any problems applying for loans or credit with a score above 650.

The next thing that you will want to do is to check your own credit score, if you have not already. Many websites offer free credit reports, so you will just have to pick one and get your score. It is very important to realize that experts recommend that you check your credit score one or two times a year, but do not do it excessively. Pulling your score too many times in a short time will hurt your credit score.

If your credit score is lower than you expected, do not be too worried. There are things you can do to improve it. The single best thing that you can do is pay off or pay down your debts. Paying off credit card debt (revolving accounts) will increase your score more than paying off installment loans (auto, home, student, and other fixed rate loans).

After you have paid off some of your debt, try your hardest not to use it again. Keeping your debt below one third of your credit line will yield you substantial results on your credit report. It can be easy to all into the trap of racking up more debt as credit becomes available.

Continue to use your paid off cards for small purchases here and there. By letting your cards go inactive, they do not factor into your credit score any longer. What this means to you is that when a card goes inactive and you have several nearly maxed out cards remaining, your score will be lower because the inactive cards do not count. If they are paid off but active, your credit score will reflect the total amount that you owe compared to the amount of available credit that you have.

Discrepancies and negative information dramatically hurt your scores. Take the time to fight any erroneous information through a dispute process with the credit card company. On another note, if you have occasional negative data, like a missed payment, many credit card companies will change it to a positive if you have made consistent payments for a certain amount of time afterwards (usually about a year).

There are many things that you can do to improve your credit score. Whether you are trying to apply for more credit or a big loan, you will need good credit. Doing things to increase your score will make applying considerably easier.