"How to Improve Your Credit Score"

It’s important to note that raising your credit score is a little bit like losing weight: It takes time and there is no quick fix. In fact, quick-fix efforts can backfire. The best advice is to manage credit responsibly over time. See how much money you can save by just following these tips and raising your score.

Pay your bills on time.

Delinquent payments and collections can have a negative impact on your credit score. If you have missed payments, get current and stay current.
The longer you pay your bills on time, the better your score.
Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years.
If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. This won’t improve your score immediately, but if you can begin to manage your credit and pay on time, your score will get better over time.

Keep balances low on credit cards and other "revolving credit".

High outstanding debt can affect a score.
Pay off debt rather than moving it around.
The most effective way to improve your score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score.
Don’t close unused credit cards as a short-term strategy to raise your score.
Don’t open a number of new credit cards that you don’t need, just to increase your available credit. This approach could backfire and actually lower score.

New Credit

Do your rate shopping for a given loan within a focused period of time. FICO® scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
Re-establish your credit history if you have had problems.
Opening new accounts responsibly and paying them off on time will raise your score in the long term.
It’s OK to request and check your own credit report. This won’t affect your score, as long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers.

Types of Credit Use

Apply for and open new credit accounts only as needed.
Don’t open accounts just to have a better credit mix it probably won’t raise your score.
Have credit cards but manage them responsibly.
In general, having credit cards and installment loans will raise your credit score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards and loans responsibly.

Note that closing an account doesn’t make it go away. A closed account will still show up on your credit report, and may be considered by the score.
 

Andre Plessis

Andre Plessis
"The Mortgage Guru"
"A Mortgage Professional whose primary goal is to provide the expertise, guidance and skills necessary to obtain the best mortgage to meet your personal needs".
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