A person's credit score is one of the most important parts of their financial health. Unfortunately, the average consumer may not know much about their score, or how to change it. No matter your position, you need to know what a credit score is, what it does, and how you can improve it.

Your credit score is a number that represents how safe, or risky, a debtor you are. If you have a high score, you represent little risk. People with high scores generally have little problem getting a loan, and the higher the score, the better terms they get when it comes to interest rates and repayment. If you have a low score, you get higher interest rates, or are denied the loan completely.

No matter what your score is, it's always better to have as high a score as possible. Whether you are looking for new credit or not, increasing your score is in your best interests. Here are a few quick tips you can use to maximize your credit score and make your life a little easier.

Tip 1: Pay Your Bills


This is the simplest, easiest way to increase your credit score. No matter if it is your water bill, your credit card bill, or your monthly car payment, always pay your bills on time. Having a good history of timely payment makes potential creditors feel all warm and fuzzy when considering you for a loan.

Tip 2: Use Your Credit


If you have a line of credit or a credit card that you haven't used in a while, go out and use it. Credit scores show your history as a debtor, and not using credit means you aren't giving potential creditors anything to look at. Even if its just a few simple purchases, using a dormant credit card can give your score a quick and easy boost.

Tip 3: Keep it Under 25


Credit cards are great for boosting your credit score. Using them and making on-time payments can do wonders for your score, but you need to be careful. If you max-out your cards, your score will decrease. If you carry a balance on your cards, make sure the amount is lower than about 25 percent of your credit limit. Creditors like to see you use your credit, but they don't want to see you go nuts with it.

Tip 4: Mix It Up


Having and using several credit cards is good. Having credit cards, a car loan, and more generally, a mix of both open credit (like credit cards) and fixed credit (like car payments) is a good way to boost your score. Creditors want to be sure you can be responsible for multiple things at once, and showing a good variety of credit lines will give them a good idea of how responsible you are.