It's important to note that raising your score is a 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.

Payment History Tips

• Pay your bills on time.
  Delinquent payments and collections can have a major negative impact on your 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.

Amounts Owed Tips

• 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.

Length of Credit History Tips

• If you have been managing credit for a short time, don't open a lot of new accounts too rapidly.
  New accounts will lower your average account age, which will have a larger effect on your score if you don't have a lot of other credit information.  Also, rapid account buildup can look risky if you are a new credit user.

New Credit Tips

• Do your rate shopping for a given loan within a focused period of time.
  The Credit Scores referred to in this website 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.

Note that 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.

Facts & Fallacies

Fallacy: My score determines whether or not I get credit.
Fact: Lenders use a number of facts to make credit decisions, including your Credit Score.  Lenders look at information such as the amount of debt you can reasonably handle given your income, your employment history, and your credit history.  Based on their perception of this information, as well as their specific underwriting policies, lenders may extend credit to you although your score is low, or decline your request for credit although your score is high.

Fallacy: A poor score will haunt me forever.
Fact: Just the opposite is true.  A score is a "snapshot" of your risk at a particular point in time.  It changes as new information is added to your bank and credit bureau files.  Scores change gradually as you change the way you handle credit.  For example, past credit problems impact your score less as time passes.  Lenders request a current score when you submit a credit application, so they have the most recent information available.  Therefore by taking the time to improve your score, you can qualify for more favorable interest rates.

Fallacy: Credit scoring is unfair to minorities.
Fact: Scoring considers only credit-related information.  Factors like gender, race, nationality and marital status are not included.  In fact, the Equal Credit Opportunity Act (ECOA) prohibits lenders from considering this type of information when issuing credit. Independent research has been done to make sure that credit scoring is not unfair to minorities or people with little credit history.  Scoring has proven to be an accurate and consistent measure of repayment for all people who have some credit history.  In other words, at a given score, non-minority and minority applicants are equally likely to pay as agreed.

Fallacy: Credit scoring infringes on my privacy.
Fact: Credit scoring evaluates the same information lenders already look at - the credit bureau report, credit application and/or your bank file.  A score is simply a numeric summary of that information.  Lenders using scoring sometimes ask for less information - fewer questions on the application form, for example.

Fallacy: My score will drop if I apply for new credit.
Fact: If you apply for several credit cards within a short period of time, multiple requests for your credit report information (called "inquiries") will appear on your report.  Looking for new credit can equate with higher risk, but most credit scores are not affected by multiple inquiries from mortgage lenders within a short period of time.  Typically, these are treated as a single inquiry and will have little impact on the credit score.

Click Here for the Glossary.

Continue by clicking on: Checking Your Report.

The information on this page and in this website is derived from sources that we believe are reliable. This information is not guaranteed.  We are not offering legal or accounting advice and suggest that you contact a lawyer and an accountant before taking any action.