22% of Consumers Have Been Denied Credit. Here's How to Avoid That Going Forward

It's a situation you don't have to get stuck in.

Being denied credit in any shape or form could be a blow to your self-esteem. But worse yet, it could mean not getting to meet a major life or financial goal.

Let's say you've applied for a mortgage loan after having found your dream home. If your application is denied, you won't be able to buy it.

Similarly, maybe you've always wanted to start a small business. If you're denied a business loan or a personal loan, you won't have the seed money to get that venture off the ground.

If you've been denied credit, you're not alone. Recent data from the Consumer Financial Protection Bureau says that 22% of all consumers were turned down or not given as much credit as they applied for at least once.

But still, it's not a good feeling to have a loan application denied. So if that's happened to you, the best way to avoid a repeat scenario is to boost your credit score. And here are two key ways you can do just that.

1. Pay all bills on time

Your payment history carries a lot of weight when calculating your credit score. When you have a solid history of paying on time, it sends the message to lenders that you can be trusted to borrow money. But a poor payment history could send the message that loaning you money is a risk.

If you want to see your credit score improve, pledge to pay all bills on time. Set calendar reminders so you don't forget when bills are due, and follow a budget so you have the money to tackle your bills as they roll in.

2. Pay down some existing credit card debt

If you make your minimum credit card payments every month, you'll be considered timely with your bills -- even if you're still carrying a balance forward. And that's important, since, as we just discussed, a strong payment history could bring your credit score up.

But the amount of credit card debt you have could also impact your credit score. Specifically, too much of it could drag your score down. So take a look at the balances you're carrying and try to figure out if you're using up more than 30% of your total credit limit. If so, whittling your balances down could help your credit score improve.

Keep in mind that when we talk about not carrying a balance that's more than 30% of your total credit limit, we mean revolving credit -- which is what a credit card gives you. Installment loans, like mortgages, don't count toward that calculation since that's not revolving credit, but rather, a set loan.

Being denied credit could put you in a really tough spot. If that's happened to you, do your best to boost your credit score quickly. In addition to the moves above, always make a point to check your credit report every few months, and work to correct errors you spot. You never know when a mistake on the part of a credit bureau is the reason for a lower score -- and a denied credit application.