Have you recently been turned down for any type of loan? Are crying, complaining, and looking gloomy not getting you anywhere? Fortunately, there are productive steps you can take to improve your chances of getting approved in the future!

A few years ago, an individual with a bad credit score (600 or less) could easily qualify for some type of mortgage or car loan. Now, people with scores below 700 cannot get loans from most reputable lenders. If you fall in this category, all is not lost. With a little discipline, you can improve your loan-ability, or creditworthiness, in the eyes of financial institutions, possibly enough to get that auto loan, home loan, or other personal loan.

The first step is to understand how your credit impacts all the various aspects of your life. When you want to rent a home, qualify for certain employment, get discounts on auto insurance, or avoid large security deposits on niceties like utilities and cell phones, you must have good credit.

FICO, the most popular credit scoring model, uses four main areas of information to determine credit scores. This hub will cover those areas by starting with the items that make the biggest impact and end with those that impact credit scores the least.

If you are behind on your bills, get current on them. The most harmful items found on bad credit reports are items in collections, late payments, or items being handled in the courts. Handle your bills with care.

• Make every payment. If you are struggling to pay your bills, make contact with your creditors and seek arrangements for making payments.
• Pay all of your bills before the due date. Again, pay all of your bills on time!
  
• Do not declare bankruptcy! Bankruptcy will harm your credit score irreparably for years to come and is one of the worst things you can do when trying to achieve a good credit report.

If you are in debt, you need to get out of it.

• Pay down any credit card balances you may carry. Carrying a balance that is more than 30% of your available credit limit may have a negative impact on your score.
• Asses your credit report and ensure that any mistakes get corrected.
• Manage your bills carefully. Monitor your checking account carefully to avoid bouncing a check or worse – having it returned.
• Don’t skip payments – if you are juggling or struggling, contact your creditors to see if some accommodation can be arranged. Pay off debt rather than moving it around. Avoid balance transfers.

Ensure that accounts you have kept open for a long time stay open. For example, don't close older credit card accounts that you have always paid on time. Closing the account may prevent the positive history from helping your score, and it may negatively impact your amount of available credit.

• It is good to show you can handle different types of accounts. Having a credit card, auto loan, student loan, etc. looks better than having only credit cards on your credit report.
• Refrain from opening a lot of new accounts over a short period of time, especially if you have very little credit history.Don’t open any credit lines you probably won’t use.
• For example, don’t open store credit cards just to get that tempting discount of 20 percent.

To get a good credit score, you need to:

• Make all debt and bill payments on time.
• Use less than 30% of your available credit limit on credit cards.
• Keep no more than 2 credit accounts open. Always use them responsibly and don't forget to make your payments on time.
• Try to use your credit cards less – even better, pay them off every month. Too much credit is just as detrimental to your credit report as not enough.
• Credit counselors can be a great source of help if you need it!

Keep in mind that negative items affect your credit score much more than positive items. A little discipline will save you a lot of time, money and worry!