5 ways to fix your credit without adding more debt

• It's important to keep your credit in good standing to get better rates, apply for exclusive credit cards that offer top-tier benefits, and save money overall.
• You don't have to take on debt to do it - there are plenty of ways to increase your score without increasing your debt.
• Start by making a point of paying your credit card bills on time, and in full whenever possible. Then, consider using cards with a 0% APR as a tool to buy more time to pay down any remaining balances, and request an increase to your credit limit.
• Make sure to get in the habit of pulling your credit report regularly to stay on top of both your credit history and any potential identity theft.
• Read more personal finance coverage.

Your credit score is a number between 300 and 850 that tells a lender if you are a high-risk or low-risk customer.

Factors like payment history, debt to credit ratios, defaults, and others provide a three-digit snapshot for lenders to make decisions on giving you more in terms of lines of credit. The higher your credit score, the lower risk you are to the lender, meaning that it's easier for you to obtain credit.

It's important to keep your credit in good standing to get better interest rates, apply for exclusive credit cards that offer top-tier benefits, and save money overall.

What's equally important is learning how to use your credit cards properly so you can maintain, and even increase, your credit score.

1. Pay on time, every time

It sounds like a simple concept, but just making one late payment can really alter your credit score. While credit bureaus tend not to share their exact calculations, it's known that payment history is significantly weighted (about 35%) in your credit score. A lender doesn't want to lend money to someone who is not reliable with their payments. On-time payments help show the lender that you are responsible with your money and are trustworthy.

So, make sure to pay your bills on time each month. The more you make on-time payments, the more you boost your credit score.

2. Pay your balance in full every month

The most responsible credit-card users treat their credit card like a debit card: They use it to spend money they have, not to borrow money they don't. Credit-card interest is notoriously high, and this type of consumer debt is therefore some of the most expensive debt you can take on.

Ideally, you always want to pay your balance in full instead of carrying a balance month to month. Paying your balance in full will accomplish a few things, including keeping your debt-to-income ratio and your credit utilization ratio (the percentage of your total credit lines you're currently using - the smaller, the better) low.

3. Transfer outstanding balances to 0% APR cards while paying them off

If you have a plan to pay down any outstanding credit-card debt, you might want to consider transferring that debt to a card that offers a 0% introductory APR.

As Business Insider previously reported, "An introductory 0% APR means the card won't charge you interest on the balance for a set period of time, established upfront. That means you can carry a balance month to month without incurring the notoriously high credit card interest rates, essentially using that money as an interest-free loan."

However, this strategy is only beneficial if you have a plan to pay down your debt in full, within the established introductory period. Once that period is over, you'll be responsible for interest payments and will have lost your advantage. If you can pay your balance within the introductory period, though, each payment you make will go straight to the principal balance, which means you can pay off your debt faster and for less money overall.

4. Increase your credit limit

When you think of fixing your credit, the last thing you consider is increasing your credit limits. But, actually, increasing your credit limit will help you do something important.

It reduces your credit utilization ratio - the amount of total credit you're using. Having a high debt to credit ratio means you have a lot of debt compared to how much credit you have, like when you max out almost all of your credit cards. A low debt to credit ratio means you are responsible with your money and spending, since you have a lot of available credit that is not being used.

So, if you increase your credit limit but not your debt, you'll be using a smaller overall percentage of your credit and improving your ratio. Having a lower debt to credit ratio means you are a lower risk to lenders as well, since you have a cushion of credit available to you and also shows you have self control.

Increasing your credit limit is as simple as calling your credit card issuers to ask. You're probably more likely to get approved if you're not carrying a balance (and especially not maxing out your cards).

5. Pull your credit report

Checking your credit report regularly and reviewing it for errors, or worse, identity theft, is crucial to keeping your credit score and overall credit health intact. Every borrower is entitled to a free credit report from each of the three credit bureaus - Equifax, Experian, and TransUnion - once a year, through AnnualCreditReport.com. You should never have to pay for your credit report. You can pull all three reports at once, annually, or space out your requests to get one report every four months and stay on top of your credit on a rolling basis.

Regularly monitoring and correcting errors on your report will ensure that your credit score is accurate. It will also give you a chance to assess your credit health so you can improve your spending habits and your overall money management.

Taking the initiative to get in control of your finances and debt is key to getting your credit score back on track. Using these methods can help you, but the most important thing you can do is charge responsibly and know when to stop.

Building your credit from scratch? Experian Boost takes your positive bill payment history into account to increase your score, fast »

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