Your credit score is the biggest indicator of your financial health. This score is stored with one of the three major credit bureaus: Equifax, Experian, and TransUnion. A low credit score can lead to the rejection of your loan applications and lines of credit, whereas a good score can see you benefit from many approvals on mortgages and other important financial deals. So, if you are wondering how to improve a bad credit score, read on to know some helpful tips:

• Do not close unused accounts
  One of the biggest mistakes people make is closing credit card accounts that they no longer use. However, your credit history goes a long way in building good credit, and this holds for unused accounts as well. A long history with a particular creditor shows up as a positive record in your favor, even if you barely use or do not use the account. Also, closing credit card accounts results in a higher debt percentage as it is distributed over fewer accounts now. Instead, you can keep the credit cards in a safe place at home and avoid carrying them with you to minimize the risk of spending.
• Separate accounts after a relationship ends
  You might think it is a good idea to keep joint accounts to share expenses, but the bitterness of a relationship can have a negative effect on your finances. So, ensure that you take steps to separate the accounts so that you don’t have to think about how to improve a bad credit score. This is not easy to do as the lender may require some of the debt to be cleared, but it is worth it.
• Try to negotiate with the lenders
  Contrary to the popular myth, your creditors do not hate you. In fact, when you do not pay, they suffer as well. So, if you are facing financial issues that are impacting your ability to repay properly, call up your creditors and explain the situation to them. Financial institutions often work out a payment plan to help customers going through financial issues. They may waive late fees, reduce your monthly minimum due, or even revise your interest rate. Talking to your lenders is better than letting the account be turned over to a collection agency, as the latter will not only impact your credit score but also see you getting continuous calls for payments.
• Review all your credit reports
  Your credit report may have inaccuracies that are causing your credit score to dip. So, if you are wondering how to improve a bad credit score, one of the first steps you need to take is to review your credit report. You need to check whether your personal information is correct, whether all your accounts are being reported, and whether there are any late payments or credit applications that look unfamiliar. Report these immediately and cross-check the information across all three bureaus. Also, you can dispute any incorrect information yourself or take the help of a credit counselor.