• Managing your credit cards well improves your credit score.credit card and hand image by Warren Millar from Fotolia.com
  
  If you apply for a loan, one of the first things the lender will want to know is your credit score. Your credit score functions as a predictor of how likely you are to default on future loans. A good credit score can get you a lower interest rate, which can save you a lot of money on your mortgage or car loan.
  
  

Check Your Credit Report

• The Fair Credit Reporting Act allows everyone to check their credit report for free once every 12 months from each of the three major credit bureaus. Your free credit report can be ordered online, over the phone or through the mail (see Resources). Credit bureaus make mistakes and if your account contains errors, your credit score may be suffering as a result. Errors to look for include accounts that do not belong to you, incorrect credit limits and late payments that were made on time. If you find errors, you can appeal them to the credit bureaus using their online dispute sites (see Resources).
  
  

Make a Budget and Calendar

• Making a budget and calendar can help improve your credit score without costing you any extra money. By planning for how you will spend you income, you can devise a plan to pay down your current debts, which will increase your credit score. If you have a hard time making payments because your due dates come at different times of the month than your paychecks, ask your creditors to change your due dates. By making a calendar that shows you when your bills are due, you can be sure to pay all of your bills on time and avoid late payments, which decrease your credit score.
  
  

Limit New Credit Applications

• Each time you apply for new credit and the creditor pulls your credit report, the credit bureaus record an inquiry on your report. Each inquiry decreases your credit score for 12 months. If you have a number of inquiries, particularly if you have a limited credit history, your score will suffer. Conversely, you should keep the credit card accounts that you have open. According to Bankrate.com, you should never close a credit card thinking that closing it will improve your credit score. Closing cards will decrease your available credit and limit your credit history.