Having a car loan helps your “credit mix,“ which is good for your score. Lenders like to see that you can handle different types of credit responsibly. A car loan is an “installment loan” (you pay a set amount each month), while a credit card is “revolving credit” (your balance can go up and down). Managing both types well shows you are a skilled and trustworthy borrower, which can boost your score.

Start with your list of debts. Two popular methods are the “Snowball” and “Avalanche.“ With Snowball, you pay the smallest debt first while making minimum payments on the rest. With Avalanche, you attack the debt with the highest interest rate first. Choose the one that motivates you most! Then, look at your monthly budget. Find any extra money, even just $20, and add it to your chosen debt’s payment. Stick with it every single month.

Good credit gives you financial power to help loved ones when they need it. You might co-sign a student loan for a grandchild with better terms because of your score. If a family member has an emergency, you could use a low-interest line of credit to assist them. Your strong credit history gives you the flexibility to be a financial helper without risking your own retirement security.

Automatic bill payments are when you give a company permission to take money from your bank account each month to pay a bill. You should use them because they are the best way to never, ever miss a payment. Since your payment history is the biggest factor in your credit score, setting this up is like putting your credit score on autopilot for success. It takes a huge worry off your plate and builds a perfect payment record over time.