What can you do to improve your credit score?

Study for the FDIC AIDT Ready-To-Work (RTW) Money Smart Exam. Practice with multiple-choice questions, each with hints and explanations. Prepare for your assessment!

Paying bills on time is one of the most effective actions you can take to improve your credit score. This is because your payment history makes up a significant portion of your credit score calculation. Consistently making payments by the due date demonstrates reliability to lenders and credit agencies, which positively impacts your score. Establishing a good track record of timely payments signals that you are a responsible borrower, thereby increasing your creditworthiness.

Engaging in other practices, such as increasing debt levels or ignoring your financial status, can lead to negative consequences, such as missed payments, which would harm your credit score. Similarly, closing all your credit accounts can decrease your available credit and potentially increase your credit utilization ratio, which may negatively impact your score as well. In contrast, timely payments are a crucial step toward building and maintaining a healthy credit profile.

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