You want to take charge of your credit but have no idea where begin. With all of the terms and advice being thrown out, learning what your priorities should be is overwhelming. It is not helpful that sometimes the advice from reputable sources makes no sense, such as you need credit to build credit or do not use all of the credit available to you. However confusing it may be, there are reasons behind each credit “rule” that come from those sources. In order to simplify the process, below are six tips for managing your credit.

1. Understand what makes up a credit score

The five factors that make up your FICO score are your payment history, credit utilization, length of your credit history, new credit, and credit mix. Payment history is just as it sounds — how you have paid past payments. Credit utilization is the percent of the available credit you are currently using. For instance, if you have a $100 credit limit and the current balance is $50, your credit utilization is 50%.

The length of time your accounts have been opened matters as they want to see more than your financial moves in the last two months. At the same time, you need to have some new accounts. Just keep the new accounts manageable and do not open more than you need. Lastly, your credit mix is determined by the different types of credit you currently have and are using.

2. Get your free credit report

Once a year, as well as any time you are denied credit, you can get your free credit report from all three credit bureaus. Obtain yours and take a good look at it. Dispute anything that you do not recognize, then make a plan to pay off any debts there.

3. Pay your bills on time

Pay all of your bills on time, including rent and utilities. Keep a good payment history with everyone you owe. The best way to pay everything on time is to make a budget you can follow, and do not charge anything that you cannot pay for.

4. Have a good credit mix

As stated above, your credit mix is the types of credit you have open. Usually, the bigger the mix, the better your score. To improve your score, you should have both revolving credit accounts, i.e. credit cards, and installment loans. Also, try not to have seven of one type and only one of another. Mix it up as well as you can.

5. Keep credit utilization low

Lenders want to see that you have access to credit but do not really need it. Ideally, you should keep your credit utilization under 30%. If it is currently higher than that percentage, you have two choices: either pay your credit accounts down or open new ones and do not use them. It will not help if you increase your credit limit but use it all.

6. Sign up for alerts

There are many companies and apps available that help you keep an eye on your credit. Sometimes your bank will do it, as well. These apps and systems can alert you if there are any changes to your credit report. This gives you the chance to check information immediately, and dispute it if it is not correct.

Knowledge is power, and being knowledgeable about your credit is a big step toward managing your score effectively. Understanding what makes up your credit score and how to manage those factors can set you on a very successful and effective path. Be both vigilant and persistent in your journey to take control of your credit, and look forward to reaping the benefits.