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A good credit score will make it easier for you to obtain credit and to qualify for loans at advantageous interest rates. After receiving your credit report from any of the Credit Reporting Agencies (CRAs), if your credit is less than good, then take the following steps to improve it:

Pay your bills on time. This is the smartest way to handle credit. Late or missed payments are a sure way to lower your credit score.

Avoid large credit card balances. Outstanding balances larger than about 25 percent of your credit limit are a red flag to financial institutions.

Don't transfer balances. Closing out an account and transferring the balance to another credit card is likely to lower your score.

Use other people's money to make routine purchases - Don't charge more than you can pay off in full each month. When you pay the full balance on your bill, you are taking advantage of an interest-free loan from the card issuer - a huge financial advantage.

If you make only minimum payments, it can take years, sometimes decades, to pay off the full debt. Once you fall into the minimum payment trap, it can be difficult if not impossible to dig your way out.

For a look at how minimum payments might work in your situation, visit the free online-loan-calculator. This loan calculator is a free tool which, when used appropriately, can help you attain a better idea of where you stand financially. Because whether you plan on getting a new auto loan, or you are considering a second home mortgage loan, it is important to base financial and loan oriented decisions on sound mathematics.

Don't cancel unused credit card accounts all at once - If you carry several credit cards, but are only using a few, perhaps two or three, close out the unused ones. Be sure to keep the cards that you have had the longest and cancel the newest cards. CRAs like to see a long record of prompt payments. Too many new cards will tend to lower your credit score.

Eliminate pre-approved credit card offers - Those pre-approved credit offers that find their way into your mailbox present a temptation for identity thieves. Once they get their hands on such a piece of mail, they can complete the offer by listing a different address. Then they have an account in your name without your knowledge.

Fortunately, there is a way for you to opt-out of these credit offers. Just visit the official Consumer Credit Reporting Industry website at optoutprescreen.

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Know the difference between debit and credit cards - When you charge a purchase on a credit card, you have a minimum of 30 days to pay the bill. That's called taking advantage of the "float." You are using the card issuer's money as a no-interest loan, provided you pay the balance in full each month.

When you charge a purchase on a debit card, your bank charges your account immediately. There is no "float" time between the time you make your purchase and the time you pay for it - and no time for you to get to the bank to make a deposit to cover a purchase larger than your bank balance.

Moreover, it's easier to overdraw your checking account when you use a debit card. When you write a check, you have the register to enter the transaction. When you use a debit card, you must rely on your memory to deduct the purchase later.

Carry cash to pay for small purchases - It's more difficult to make frivolous - of little weight or importance - purchases when you have to reach into your pocket for cash. A pocketful of credit cards makes it too easy to lower your financial inhibitions.

Don't be like the shopper putting two magazines on a credit card, or the college student who regularly charges a half-dozen candy bars to take back to her/his dorm. Small purchases made regularly with credit cards can grow quickly to mammoth proportions.

In a nutshell, credit in itself is not harmful. In fact, used skillfully credit can be a profitable tool for managing your business and personal finances. Observance of these tips will help to make credit one of your assets, not one of your liabilities.