How to Imporve Your Credit Score
- 1). Pay down your revolving credit balances. Credit cards and lines of credit are two common revolving credit lines. The proportion of your balance to your credit limit is a large determinant in calculating your credit score (30 percent), according to MyFico.com.
- 2). Pay off collection accounts and charge-offs. While paying off a collection account or charge-off will not remove the item from your credit bureau (it can stay on for seven years), it can improve your credit score. It also looks good to potential lenders; it shows you're making an effort to settle your mistakes.
- 3). Pay your bills on time, every month. Your credit score won't be docked if you're a few days late; in fact, it won't be visible at all. However, once a payment is 30 days late, it shows up as a late payment, and even one late payment can have a negative impact on your credit score.
- 4). Go easy on requests for credit. When you apply for an extension of credit, the lender runs a "hard pull" on your bureau. This pull shows up on your report as an inquiry. Excessive inquiries can lower your credit score; in addition, it makes you look "credit hungry" to a potential lender. When you pull your own credit, you are performing a "soft pull." This does not count against you.
- 5). Acquire new credit, if you haven't had any recently. If you have a long history of delinquency, you'll need to establish some positive accounts to get back on track. The only way to do this is by acquiring new credit.