Getting a better credit rating is often essential for life’s big moments. If you want to take out a mortgage, a business loan, or a new credit card, you’ll need a good rating. Here are the situations which will help you to improve your credit rating.

1. Pay your bills on time

When you are late paying bills, that shows up on your credit rating. Don’t let yourself get behind. Not only will it destroy your rating, but it will also cost you extra money in fees. A long record of timely payments will stand you in good stead.

2. Don’t apply for any new credit cards

Your credit is likely to drop slowly if you take out a new credit card. It could be a sign that you are spending beyond your means. Try to limit yourself to what you already have.

3. Pay off outstanding debts

Whenever you can, get together some cash and pay off your debts early. This will show that you are able to budget sensibly and that you are serious about getting rid of debt. Don’t get into any more debt once those are gone.

4. Keep credit card balance low

A high balance on your credit card could indicate that you aren’t able to pay it off. Keep the balance low consistently by paying it off regularly. This will improve your credit score over time.

5. Diversify your credit

Try to prove that you can pay off different kinds of credit. Short and long-term payment plans are recommended. If you can maintain a mortgage, credit card, furniture payments, and car loan, all at the same time, it’s a good sign.

6. Check debt to credit ratio

Your credit is how much money you have available to use as a loan or temporary funding. Your debt is how much of that available money you have spent without paying it off. If you’ve got $1,000 credit and $100 debt, that’s a good ratio–ten percent. But if your credit card had a limit of $10,000, you’d have a one percent ratio, which looks stunning. Get a higher limit but don’t spend more.

7. Hold onto safe accounts

Having a good account for a long time without missed payments will improve your score. Don’t switch accounts regularly or you may lose this bonus.

Once you try these tricks, you will see your credit rating improving steadily month after month.