David Bakke is a financial contributor for Money Crashers Personal Finance. He covers topics such as money management, insurance rates, frugal living, and getting out of debt.

As money gets tighter for many Americans, insurance rates are steadily climbing across the board. A recent study by the Commonwealth Fund showed that health insurance premiums increased by 63 percent from 2003 to 2010, and that having just a single citation on your driving record can up your car insurance premium by as much as 22 percent.

Insurance premiums are partly determined by factors you can’t control (like your age and gender). However, other factors are in your control, such as your credit score. Improve yours, and you may be able to significantly lower your insurance premiums.

5 tips for improving your credit score

1. Review your credit report

Request a free copy of your credit report once a year from all 3 major credit reporting agencies (Experian, TransUnion, and Equifax), and check it for errors. Look for accounts that don’t belong to you and other inaccurate information. If you find a problem, contact the issuer first. If that doesn’t yield results, file a dispute online with each reporting agency.

2. Pay your bills on time

Whether or not you pay your bills on time accounts for 35 percent of your credit score. If you’ve paid bills late in the past, you can slowly build your credit back up by making sure it doesn’t happen again. Set up automatic bill payments, or create a payment calendar to pay credit cards, utilities, and all other bills on or before their due dates.

3. Keep all credit lines open

Keep unused credit lines open to improve your credit utilization percentage (the sum of the outstanding balances on all your credit cards divided by the sum of each card’s limit). In other words, the more credit you have available relative to your level of debt, the better. Be aware, however, that banks may close credit cards with sustained periods of inactivity. To avoid this, put minor purchases on your seldom-used cards every few months and pay them off immediately. This will keep your credit utilization percentage down and your credit score up.

4. Reduce hard credit pulls

A soft credit pull, or check, has no effect on your credit score. For example, an employee background check would be considered a soft credit pull. However, hard credit checks — which occur when you apply for a credit card or sign up for new utility services — do impact your score. One or 2 such credit checks won’t ding your score too badly, but a great many in a short period of time most definitely will.

5. Pay down debt

Another way to improve your score is to pay off your debts. Start by paying off your high interest debts. You can free up income by reducing your expenses: clip coupons, raise your thermostat by several degrees, and reduce your cell phone or television services. Use the money you save to increase your monthly debt payments.

Final thoughts

To a large extent, your credit score determines your financial well-being. And the actions you take now will affect your life well into the future. A good credit score can open doors to low interest rates and preferential treatment, while a low score can shut the same doors just as quickly. Improve your score to save money on insurance premiums, lower interest rates, or land a better job — and start today!

For your car