1. Home
  2. Mortgage information
  3. Improve Your Credit Score

Everyone wants a quick credit score fix.  Google–fix bad credit—3,200,000 results!  Unfortunately it takes time to fix a credit score.  In fact, out of all of the ways to improve a credit score, quick-fix efforts are the most likely to backfire, so beware of any advice that claims to improve your credit score fast.

You need to rebuild your credit over time.  The tips below will help you do that. They are divided up into categories based on the data used to calculate your credit score.

 

3 Important Things You Can Do Right Now

  1. Check Your Credit Report – Credit score repair begins with your credit report. If you haven’t already, request a free copy of your credit report and check it for errors. Your credit report contains the data used to calculate your credit score and it may contain errors. Check to make sure that there are no late payments incorrectly listed for any of your accounts and that the amounts owed for each of your open accounts is correct. If you find errors on any of your reports, dispute them with the credit bureau.
  2. Setup Payment Reminders – Making your credit payments on time is one of the biggest contributing factors to your credit scores. You could consider enrolling in automatic payments through your credit card and loan providers to have payments automatically debited from your bank account, but this only makes the minimum payment on your credit cards.  You need to do more.
  3. Reduce the Amount of Debt You Owe – This is easier said than done, but reducing the amount that you owe is going to be a far more important achievement than improving your credit score. The first thing you need to do is stop using your credit cards. Come up with a payment plan that puts most of your available budget for debt payments towards the highest interest cards first, while maintaining minimum payments on your other accounts.  Only use cash and keep a spending dairy.  Learn where your money is going….do you really need Starbucks every day?

More Tips on How to Fix a Credit Score & Maintain Good Credit

Payment History Tips

Your payment history is  35% of your  FICO Score, this category has the greatest effect on improving your scores, but past problems like missed or late payments are not easily fixed this takes time.

  • Pay your bills on time.
    Do NOT be late!!! A day late is still late.  No fudge room.
  • If you have missed payments, get current and stay current.
    The longer you pay your bills on time after being late, the more your FICO Scores should increase. Older credit problems count for less. The impact of past credit problems on your FICO Scores fades as time passes and as recent good payment patterns show up on your credit report. So pay on time  every time!
  • 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. Sorry.   Don’t go into collection.
  • If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor.
    This won’t rebuild your credit score immediately, but if you can begin to manage your credit and pay on time, your score should increase over time. And seeking assistance from a credit counseling service will not hurt your FICO Scores.

Amounts Owed Tips

The amount you owe creditors is 30%of your  FICO Score and can be easier to clean up than payment history, but that requires financial discipline and understanding the tips below.

  • Keep balances low on credit cards and other “revolving credit”.
    High outstanding debt can affect a credit score.
  • Pay off debt rather than moving it around.
    Don’t borrow from Peter to to pay Paul.  In fact, owing the same amount but having fewer open accounts may lower your scores.
  • Don’t close unused credit cards as a short-term strategy to raise your scores.
  • 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 your credit scores.

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 scores 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.
    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 credit score in the long term.
  • Note that it’s OK to request and check your own credit report.
    This won’t affect a 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 Tips

  • 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 credit score.
  • Have credit cards – but manage them responsibly.
    In general, having credit cards and installment loans (and paying timely payments) will rebuild your credit scores. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards 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 a score.

To summarize, “fixing” a credit score is more about fixing errors in your credit history (if they exist) and then following the guidelines above to maintain consistent, good credit history. Raising your scores after a poor mark on your report or building credit for the first time will take patience and discipline.