16% of Americans Have Poor Credit. Here's How to Boost Your Score Out of That Range

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FICO® Scores (the most commonly used credit scores in the U.S.) range from a low of 300 to a high of 850. But within that range, there are different credit score tiers you might fall into. And the higher your tier, the more likely you are to get approved for a loan or credit card when you apply.

Experian, one of the three credit bureaus, says that a FICO® Score of 800 to 850 is exceptional, while a score of 740 to 799 is very good. If your credit score falls between 670 and 739, it's good.

But once your credit dips below a 670, your borrowing options may get more limited. And if your credit score falls below a 580, it's considered poor credit. That means you might really struggle to get a credit card, auto loan, mortgage , or whatever other loan you might end up needing.

If your credit score is stuck in the 300 to 579 range, it's important to try to boost it to open up your borrowing options. Here are a few ways to do so.

1. Pay every bill on time

Your payment history carries more weight than any other factor when calculating your credit score. So if you're able to show that you're on time with bills, your score can improve over time.

Start by paying your credit cards on time every month. If you can't pay your balances in full but you make your minimum payments by their due dates, you're considered timely (though it's best not to carry too large a balance, which we'll discuss in a bit). Also be sure to make loan payments on time.

And if you're already paying your rent on time, ask your landlord to report those payments to the credit bureaus. This isn't always something that happens automatically, so you may need to ask your landlord to sign up for a third-party reporting service like Piñata or RentRedi that allows them to do this.

2. Pay off as much of your balances as you can

The lower your credit card balances relative to your total spending limit, the more your credit score can improve. It's best to keep your credit utilization to 30% or less. This means that if you have a $10,000 spending limit across your various cards, you'd ideally want your outstanding balance to not exceed $3,000.

If you currently owe $9,000 on a $10,000 limit, that can hurt your credit score. And you're probably not going to pay a balance that size off overnight. But the more you whittle it down, the more good it can do for your score. Getting that balance down to $8,000 for example, is better for your score than $9,000.

3. Check your credit report for errors

The three credit bureaus -- Experian, Equifax, and TransUnion -- each let you pull a free copy of your credit report every week at AnnualCreditReport.com . It's important to check your credit report regularly for errors, because some mistakes could cause damage to your credit score.

For example, if there's a late payment on your credit report that's not legitimate, it could be dragging your credit score down. So that's something you'd want to correct.

Now you don't have to check each credit report from each bureau every single week. But if you've never checked your credit report before, start by pulling a copy from all three bureaus so you can compare the information that's on there. It's possible for that information to vary from one bureau to another, which is why you need to review all three reports initially.

From there, you may decide to either pull your three credit reports at the same time every two to three months, or pull one report every month, rotating between bureaus. This is something you should make an effort to do even if your credit score is in great shape, because you never know when incorrect information might find its way onto your credit report.

Having poor credit could seriously hurt your chances of being able to borrow money. But if you take these steps, you may find that you're slowly but surely able to get your credit score to a much better place.

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