Your credit score is one of the most important measures of financial health. It tells lenders how responsible someone is with their finances.

Good credit is the key to better deals on everything from insurance to mortgages. A FICO credit score is a number between 300 and 850 that rates a person’s creditworthiness. The higher the score, the better the borrower looks to lenders.

Good credit is something to cherish and nurture. Taking care of your money is an act of self-love. Love and care for your money and it will love and care for you right back.

Creditors use credit scores to evaluate whether you are a good or a bad risk. The factors that contribute to a high credit score include a history of on-time payments; keeping a low balance on credit cards; a good mixture of different credit cards and loans; older credit accounts; and minimal inquiries for new credit.

High balances and maxed out credit cards lower your credit score. Late or missed payments, high credit card balances, accounts in collections, bankruptcy, foreclosures and judgments can all hurt your credit and can contribute to what interest rate the lender will charge you.

Some important things to do to keep credit in good standing include doing everything possible to avoid late payments and paying off credit card balances.

If that’s not possible, make sure to keep the total balance at 30% or less of the credit limit. The credit agencies call that “credit utilization balance.”

Limit requests for new credit. There are two types of credit inquiries: soft credit inquiries and hard credit inquiries.

Soft inquiries are things like checking on credit, giving a potential employer permission to check credit, or credit card companies that check for pre-approved credit offers. Those are all OK.

Hard inquiries adversely affect your credit score.

Applying for loans requires hard inquiries into credit scores to see how trustworthy someone is with borrowed money.

Companies also use credit scores to determine how much interest to charge or how high insurance premiums should be.

Keep the old credit cards that are never used. Everybody likes to switch cards because the newer credit cards have better mileage deals, etc. But don’t close those old accounts just yet. Credit agencies and lenders want to see an older average credit age.

Canceling a credit card could impact some of these factors.

Closing a 10-year-old credit card will affect credit history and credit mix.

By canceling the account instead of cutting up the card, you are erasing a large amount of unused credit from the credit mix. This is something that Equifax, TransUnion and Experian will take note of, and it won’t have a good impact on your credit history or credit score.

Keeping unused credit increases your score.

Credit bureaus like to see old accounts, especially if they’re being paid on time.

The best strategy for paying down any kind of debt is referred to as “snowballing” the debt.

The concept is to pay down the debt with the highest interest rate first. although some people prefer to pay off small debts first so they can have a sense of improvement and/or accomplishment.

Assuming that someone has been making payments on all their debts, once the first loan is paid off, take that monthly payment and add it to the monthly payment you have been making to the lender with the second-highest interest rate. Now, the second loan will be paid off faster.

During the pandemic, everyone is entitled to get a free credit report weekly. You can get this from one or all of the national credit bureaus by visiting annualcreditreport.com or by calling 1-877-322-8228.

If your credit score isn’t in a good spot, improving it is possible, and that requires discipline and consistency.

It can take some time. Having someone as an accountability buddy can help you achieve this.

Actively taking care of your finances, paying bills in a timely manner, avoiding new debt and optimizing your credit cards will help your credit score begin its upward trajectory.

Judy Heft is the CEO/founder of Judith Heft & Associates, a financial and lifestyle concierge celebrating 25 years in business helping people stay financially organized. She is a certified money coach and the author of “How to Be Smart, Successful and Organized With Your Money.” For more information visit www.judithheft.com.