Just like a top football, basketball or hockey player is drafted based on their stats, your credit score is used to determine your financial fitness.

Your credit score is a strong indicator of ability to handle debt. It's based on several aspects of your financial picture and can help creditors determine if you're responsible with your money.

Improving your credit score in 2013 may be an easy way to improve your overall financial scorecard. Doing so may help you get approved for loans and lower your interest rates and insurance premiums.

The following steps may improve your credit score in 2013:

Pay on time. Payment history is one of the most important factors used to calculate your credit score, so consistently paying on time may be a way to boost your score if you have missed payments in the past.

Reduce debt-to-credit ratio. Focus on paying down the amount you owe on your credit cards so each one has an available credit of at least 50 percent. Doing so improves your debt-to-credit ratio and in turn may improve your credit score.

Use more than one type of credit. Your score is built around both revolving (ex. credit card) and installment (ex. mortgage loan) credit. Having both types in your credit history shows you can responsibly handle multiple kinds of credit, and in turn may improve your score.

Stick with the accounts you have. Opening new accounts just to increase available credit means new inquiries on your credit report, which may lower your score. On the other hand, avoid closing accounts you already have, even if you don't use them that often. Doing so can negatively impact your debt-to-credit ratio and credit history -- both of which are used to calculate your score.

Source: BMO Harris Bank

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