Do you need to apply for a mortgage, purchase a new vehicle, or renew your insurance?

Did you know that your credit score has a big influence on all of these financial decisions?

Experian gives the best example to illustrate it. When applying for a $350,000 mortgage loan (30-year terms) with a credit score of 700, you'll pay $16,319 more than an applicant with a credit score of 760. That's a substantial sum of money.

According to the results of a survey conducted by OnePoll in collaboration with LendingPoint, 54 percent of Americans believe that a poor credit score makes it difficult to get a loan accepted. Another 45 percent said they were turned down for a loan due to a poor credit score. Because of their credit score, 43% of those who were accepted were given restrictive terms and higher interest rates.

We've put together this small guide to help you boost your credit score if you're looking to apply for a personal loan.

There are five things you can do to boost your credit score.

To assess possible problems, obtain a free credit report.

The first step is to identify the areas of your credit profile that are problematic. One of every eight adults in the United States is unaware of their credit score.

Here's what you can do:

Experian, Equifax, or TransUnion all provide free credit reports.

Examine the report for any inconsistencies in financial transactions or history.

Begin implementing a recovery plan.

Any credit reporting errors should be challenged.

One of the simplest ways to improve your credit score by a few points is to challenge and correct any credit reporting errors. For example, if your credit report contains an incorrect late payment fee, having it removed would improve your credit score.

Always pay the bills on time.

Your payment history accounts for 35 percent of your credit score. Getting current on your bills will boost your credit score if you've been late on payments or instalments. Some companies can also help you increase your credit score by giving you positive credit for being financially responsible. Common programmes include UltraFICO and Experian Boost.

Reduce the amount of credit you use.

For most lenders, credit usage is a key factor. It shows how much credit you've used out of your total credit cap. For example, if you have $10,000 in credit available and are only using $6,000, your credit utilisation rate is 60%. When applying for a personal loan, a lender would look for a lower credit utilisation rate, which shows the willingness to pay on time. While there is no fixed number for ideal credit utilisation, holding it below 35% is a reasonable starting point.

Existing credit accounts should not be closed.

When exercising financial restraints or a "cash detox," most people are prone to closing their credit accounts in order to boost their credit profile. While this may keep you from taking on more debt, it will also reduce your total credit limit. Since a lower credit limit will greatly increase your credit utilisation rate, you should avoid closing any current credit accounts.

Conclusion

Before extending a line of credit, lenders examine every aspect of your financial life. Give yourself some time to restore your reputation if you have a low credit score by following these tips. The key is to play to your strengths while still demonstrating financial responsibility to increase your chances of acceptance.

If you want to improve your credit score, CreditRepair.com is a great place to start. It will help you get your finances in order and save you money in the long run. You can also get a one-on-one credit consultation and game plan tailored to your specific needs.