At some point or the other, you would have heard the words FICO score. This is the score that shows your credibility in the finance world. When you apply for a loan, your lenders will first check your FICO score to determine your eligibility. A good FICO score can also get you a loan with a better interest rate.

So, if you are wondering how you can improve your FICO score, you need to know how to improve a bad credit score, because they are both linked.

• Learn more about your credit scores
  Most people have almost zero knowledge of how FICO scores work. This is quite a problem as the lack of knowledge means you do not know how to improve a bad credit score. The range of FICO scores is between 300 and 850. Any number above 800 is an exceptional score, and any score above 670 is good. At the same time, a score below 579 is poor. So, knowing the value of a good credit score will help you understand what you need to work toward.
• Know your credit problems
  After finding out what your credit score is, you should examine all your possible credit issues. Make a list of any problems that might affect your credit score like late payments, mistakes in the credit report, and collections accounts that need your attention. Once this is done, get to work on each one as soon as possible. Faster action gives you a better chance of pulling that score up.
• Get your first credit card
  We are raised to believe that credit cards lead to low FICO scores for most people, but that is not true. A credit card only damages your score if not managed well. In fact, it is advisable to have at least one credit card to maintain a good credit score. So, if you are wondering how to improve your credit score, it is time to get your first credit card.
• Choose a secured credit card option
  Many financial experts recommend taking a secured credit card for financial health. This means that if you get a credit card for $500, you have to deposit $500, or a similar amount, in the bank. Choosing this credit card type ensures that you never accumulate large balances or go into collections as the deposit can be used to make the payment if you are short on cash.
• Do not apply for too many credit cards
  Again, this might sound like we are contradicting ourselves. However, when we say that you should apply for a credit card, we do not imply that you should go on a credit spree and apply for many. Multiple inquiries on your credit will hurt your FICO score, and you do not need so many cards lying around as well. Be smart and only keep one or two credit cards with banks that offer the benefits you need.