Knowing and understanding your credit score is the first step towards getting whatever you are after if you are ready to apply for credit. In most cases, just a few simple tweaks can make a drastic improvement in your score, which can open up a world of options when you sit down to discuss the credit card, auto loan, or home mortgage you are interested in acquiring.

What Credit Score Do I Need?

The minimum credit score required will vary quite a bit depending on the type of loan you are seeking, but as a general rule, anything under 600 is bad, while anything over 780 is excellent.

If you are looking to purchase a new vehicle, a credit score of 620 is generally considered the minimum, but higher scores will open up more options for better payment terms.

For mortgages, a credit score of 580 is the minimum required for an FHA loan, and 620 is necessary to consider a conventional loan. In both cases, as with everything else in the lending world, higher scores will get you access to better terms and less hassle to get final approval.

How Can I Improve My Credit Score?

Regardless of where your credit score sits today, there is no reason that it can’t improve significantly with just a few simple tweaks.

1. Pay Down Those Credit Cards

In the credit score world, outstanding credit card balances count against your “revolving debt,” and you can see dramatic improvements when those balances are paid off every month. So the priority for improving any score is to get those credit card balances down as low as possible.

2. Request Removal of Any Collections

Another common problem that holds down credit scores is accounts that have fallen into collections. In many cases, you can get these removed immediately by simply contacting the collection company and working out a deal with them.

3. Limit Those Credit Inquiries

The number of recent applications for new credit showing up on your report can also be something that holds your score down for a while. Make sure that you allow months of space between requests for new credit so that you don’t have to worry about this one!

4. Keep Old Accounts Open

While it might sound counterintuitive, the length of your credit history is also a component of your credit score, so keeping your oldest accounts open and active is a must for moving your credit score higher. Closing those old accounts will shorten your credit history and could harm your score.

5. Pay Your Bills on Time

This should go without saying, but if you aren’t paying your bills on time now, then you shouldn’t be applying for new credit in the first place. At the same time, late payments from absent-minded consumers are an extremely common ding on credit reports, so make sure your bills are paid on time to avoid this one.

Your credit score might define you in the eyes of a lender, but that definition isn’t permanent. You can improve your score over a short time by simply understanding how it works and hustling to improve on the areas where you are weak, so pull your credit report and get to work!