Your credit score is the most influential factor in determining whether you will be approved for a loan or mortgage and the interest rate you will have to pay. Your credit score or FICO (the term refers to the company, Fair Issac Corporation, which created the method used to calculate credit scores) is a measurement that the credit reporting bureaus use to predict your creditworthiness and helps creditors determine whether to grant you credit. Your score can be any where between 300 to 850. The higher the number, the more credit worthy you are and the lower the interest rate you will pay. Since having a high credit score number directly correlates with the amount of money your loan or mortgage will cost you, it obviously pays to maximize the conditions that will give you the highest score possible.

Below are six ways to maximize your own credit score:

Consult With Your Lender

Find out what score your lender will need to see in order for you to get the most favorable interest rate on your loan. The average credit score number is 677, according to Experian. You normally need to have a credit score of at least 750 or higher to get the best rates. Anything between 600 and 750, your interest rate will be higher. The lower your number, the higher the rate. If your credit score is less than 600, you will be paying a much higher interest rate. That is if you can get approved. If you do have a low credit score, be sure to shop around and get quotes from multiple creditors to get the best deal.

Check Your Credit Report For Accuracy

Over a quarter of all credit reports contain errors that can cause a denial of credit report according to the U.S. Public Interest Research Group. Be sure to check your score with all three major credit reporting bureaus and seek to correct any errors before applying for new credit. You can receive one free copy of your credit report each year but obtaining your credit score will cost your a nominal fee. Like your credit report, you’ll want to confirm your credit score is accurate before seeking to take out any new credit.

Always Pay On Time

Being late with a payment, even one, is the single biggest thing that will decrease your credit score. Past payment history including late or skipped payments, bankruptcies and foreclosures contribute to one third of your overall score. Paying your bills on time on or before the due date is the single most important thing you can do to keep your score high.

Pay Off Your Credit Balances

Paying off balances is a quick and easy way to increase your score. Like the tip above, one third of your overall credit score is based on the ratio between your current balances to your overall available credit. As a rule of thumb, you want to keep your balances at no more than 50 percent of your available credit to keep your credit score high.

Do Not Close Accounts

Fifteen percent of your overall score is based on how long you’ve had access to credit. As strange as it might seem, closing accounts you no longer use actually shorten your credit history time line and lowers your score. Lenders will take into account the average age of all your credit accounts, so an older account can help increase your overall score.

Avoid Opening New Credit Accounts

Take out new credit or loans only if absolutely necessary. Taking out new credit lines can negatively affect your credit score in two ways. First, inquiries to your credit report by lenders contribute ten percent to your overall score and multiple inquiries can lower your score. Also, new lines of credit will negative affect the average age of all your current accounts which will also lower your overall score.