The best ways to raise your credit score

The best ways to raise your credit scoreCredit scores range from 300 to 850, with consumers falling into six different ranges. In an ideal world, individuals should aim to score a 760 or higher to find the best deals on car loans, insurance rates and more.

When one has a low credit score, banks are less likely to lend to that person because he or she is seen as a risk. All is not lost, however; there are a few things that can be done to gradually raise the number for better financial standing. The most important is to pay bills on time, because it accounts for the largest portion of the FICO score at 35 percent. The borrower must pay at least the minimum amount listed on the bill.

Part of the score is determined by the length of a person's credit history, beginning the day one opened his or her first credit card. The longer a history an individual has, the better. Unless necessary, avoid canceling your oldest credit card, as it will erase a large chunk of your credit history.

Lastly, the debt-to-credit limit ratio should be kept low. This is the percentage of money currently borrowed compared to the amount one is allowed to borrow. Keeping the ratio low may prompt the credit card company to raise the credit limit, which reduces the ratio even more.