Improving Your FICO®
Score
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.
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.
- 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.
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 score.
- Have
credit cards - but manage them responsibly.
In general, having credit cards and installment loans (and paying timely
payments) will raise your score. 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 the score.