It's a well known fact that lenders will give people with higher credit scores lower interest rates on mortgages, car loans and credit cards. If your credit score falls under 620 just getting loans and credit cards with reasonable terms is difficult.

There are more than 30 million people in the United States that have credit scores under 620. Here are five simple tips that you can use to raise your credit score.

Get a copy of your credit report
It is important to obtain a copy of your credit report because if there is something on your report that is incorrect, your credit score will be higher until it is removed. Make sure you contact the bureau immediately to remove any incorrect information.

Your credit report should come from the three major bureaus: Experian, Trans Union and Equifax. It's important to know that each service will give you a different credit score.

Pay Your Bills On Time
Your payment history makes up 35% of your total credit score. Your recent payment history will carry much more weight than what happened five years ago.

Missing just one month’s payment on anything can knock 50 to 100 points off your credit score. Paying your bills on time is a single best way to start rebuilding your credit rating and raise your credit score.

Pay Down Your Debt
Your credit card issuer reports your outstanding balance once a month to the credit bureaus. It doesn't matter whether you pay off that balance a few days later or whether you carry it from month to month.

Most people don’t realize that credit bureaus don’t distinguish between those who carry a balance on their cards and those who don’t. By charging less, you can raise your credit score even if you pay off your credit cards every month.

Lenders also like to see a lot of room between the amount of debt on your credit cards and your total credit limits. So the more debt you pay off, the wider that gap and the better your credit score.

Don’t Close Old Accounts
In the past people were told to close old accounts they weren’t using. But with today's current scoring methods that could actually hurt your credit score.

Closing old or paid off credit accounts lowers the total credit available to you and makes any balances you have appear larger in credit score calculations. Closing your oldest accounts can actually shorten the length of your credit history and to a lender it makes you less creditworthy.

Stay Out Of Bankruptcy
Bankruptcy is the single worst thing that will destroy your credit score. Bankruptcy will lower your credit score by 200 points or more and is very difficult to come back from because a bankruptcy on your credit record is reported for up to 10 years.

The reality of a bankruptcy is it will limit you to high-interest lenders that will charge high interest rate payments from you for years.It is better to get credit counseling to help you with your bills and avoid bankruptcy at all costs. By getting credit counseling instead of declaring bankruptcy you can raise your credit score over a much shorter period of time.