Good credit matters. Your credit history may affect your ability to buy a house or car, qualify for a new apartment, or even get a job. With great credit, you may also be able to lower your insurance costs, access more options for loans and credit cards, and land better interest rates.

But how do you actually build your credit?

Improving your credit is something that anyone can do — even if you don’t yet have a credit card. With time and some simple financial habits, you can build a great credit history. Here’s how:

1. Make timely payments your top priority.

The #1 thing you can do to improve your credit score is to pay your bills on time. It’s an essential principle that’s true for every type of credit you might have — loans, credit cards, or open lines of credit. If you start to accrue late payments, however, you can quickly find yourself in two types of trouble:

You’re faced with costly fees.

When you’re late with a payment, you may see late fees added to your next bill. You’ll also likely accumulate added interest or even penalty APRs. If you don’t pay your bills on time, the extra costs can add up quickly.

Your credit score may take a hit.

The timeliness of your payments plays a massive role in the health of your credit. The impact to your credit score may depend on how recent the late payments are, how severe the delinquency is, and how frequently the late payments occur. While late payments may negatively affect your credit score, they may start to have less of an impact on your credit score as time passes if your more recent payments are made on time.

Focus on bringing any past-due accounts current and making on-time payments going forward. Fortunately, getting bills paid on time is as simple as coming up with a plan that works for you. Check the due dates for each of your bills, and consider setting up automatic payments, or using your phone or computer calendar to set payment reminders, to ensure your payments are always on-time.

2. Spend (way) less than your limits.

Your credit limit is the maximum amount you can charge to your card. Your credit used is your card’s outstanding balance — the amount you’ve charged but haven’t paid off, as well as any interest incurred. But how much should you charge to keep your credit healthy?

A study conducted by LendEDU found that 4 in 5 millennials believe that increasing their card balances improves their scores, but the opposite may be true. Using too much of your credit limit is a red flag for lenders. They may fear you’re struggling to manage your debt, and that makes you a bigger risk as a borrower.

As a general rule of thumb, ensure that the credit you use is no more than 30% of the limit on your card. (In fact, your best bet is to ensure your card charges don’t exceed the amount you can repay each month.) If you’re already above that threshold, work toward paying down your balance. Be mindful of closing accounts as well – you will be reducing the amount of available credit, and in turn impacting your credit utilization ratio. The less of your available credit you use, the higher your score is likely to be.

3. Pay down your debt faster.

We covered the importance of maintaining a low utilization ratio, but what do you do if you’re already above the recommended threshold? Carrying too much debt can damage your credit and make interest payments feel like a permanent part of life, but a few simple strategies can help you pay down your balances, and get you moving toward a healthier relationship with credit:

Consult a credit counselor.

A certified credit counselor can review your financial situation, help you build a workable budget, and coordinate repayment options with your creditors. You may want to check upfront if the credit counseling service you choose charges any fees for their services.

Consider consolidation.

If you’re carrying high-interest debt, look into a consolidation loan or balance transfer card that offers a lower interest rate. There may be side effects to consolidating certain types of debt, however, so always make sure you understand how your accounts will be affected and consult a professional with any questions.

Adopt a debt repayment plan.

Whittle down the time you spend in debt and the cash you put toward interest. One approach is to make the minimum payment required on all debt, and use any remaining money to pay off the debt with the highest interest rate. This approach, commonly known as the debt avalanche method, can save you money in interest payments as you work toward a debt-free life.

4. Build credit even without a credit card.

Using a credit card responsibly is just one way to increase your credit score and bolster your financial health. But you don’t need a card to improve your credit history.

Other types of lending accounts—such as a car loan, mortgage, HELOC, or student loan—are also forms of credit, and in most cases, the way you use those accounts affects your credit score. If you don’t yet have a loan or line of credit, you can use what you do have with a bit of creativity.

Consider Experian Boost®. Ordinarily, the payments you make for phone service and utilities aren’t included in your credit history, but Experian Boost’s® free service recalculates your score with these payments in mind. Signing up may give you a quick bump up in your credit score. There may be a monthly fee or charge to use the service.

5. Consider a secured credit card.

What if you do want a credit card, but you don’t qualify for one just yet? A secured credit card may be right for you. A secured credit card is backed by a cash deposit, typically equal to the amount of your credit limit. Secured cards offer many of the benefits of a traditional credit card, but they’re often available to people with lower credit scores.

A secured credit card can be a great option for building your credit — especially if you’re new to credit or are trying to rebuild after some financial mistakes. When you use that card responsibly over time, consistently making on-time payments, and manage other factors that go into building your credit report and score, your smart credit habits can give your score a healthy boost.

Building great credit may take time, but the path you take doesn’t have to be complicated. By following a few simple rules consistently, you can makeover your relationship with debt. When you do, you’ll pave the way to a financially healthy future.

Is a secured credit card a great fit for you? Visit your nearest M&T Bank branch or call us at 1-877-378-1276 to apply.

For access to additional financial education, for wherever you are on your financial journey, visit M&T Money Mentor.

This article is for informational purposes only. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. Please consult with the professionals of your choice to discuss your situation.

M&T Money Mentor content is provided by EVERFI, Inc, for educational purposes only. It is not intended to be an offer or solicitation for a product or service and is not an offer to extend credit. The information provided is also not intended to provide investment, tax or legal advice and may contain information on products or services not available at M&T Bank and may describe practices or policies not available or applicable to M&T products. All examples are for illustrative purposes only.

All M&T loans and lines of credit are subject to an application and credit approval.

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