Improve Your Payment History

• Always pay your bills on time. Late payments play a major role in driving down your score.

   

• If you have past-due bills now, get current and stay that way.

   

• Contact your creditors as soon as you know you will have a problem paying bills on time. Try to work out a payment arrangement and negotiate with them to keep at least a portion of the late notations off of your credit reports.

   

• If your situation is serious, see a legitimate, non profit credit counselor. Avoid the scam artists who promise a quick reversal of your credit problems.

Keep Debt to a Minimum

• Keep your credit card balances low. High debt-to-credit-limit ratios drive your scores down.

   

• Pay off debt, don't move it around. Owing the same amounts, but having fewer open accounts, can lower your score if you max out the accounts involved.

   

• Don't close unused accounts, because zero balance might help your score.

   

• Don't open new accounts that you don't need as a quickie approach to altering your debt-to-credit-limit ratios. That can lower your score.

Length of Your Credit History

• Time is the only thing that can improve this aspect of your scores, but you can manage it wisely:

   

  • Don't open several new accounts in a short period, especially if your credit history is less than three years. Adding accounts too rapidly sends up a red flag that you might not be able to handle your credit responsibly.

Manage New Credit Wisely

• Several credit inquiries during a short period means you are attempting to open multiple new accounts, and that lowers your credit scores.

   

• Credit scoring software usually recognizes when you are shopping for a single loan within a short period of time, such as a home loan. If multiple inquiries are necessary, have them pulled as closely together as possible.

   

• Checking your own credit report does not affect your scores.

   

• Do try to open a few new accounts if you've had credit problems in the past. Pay them on time and don't max out your credit limits.

The Types of Credit You Use

• A mixture of credit cards and installment loans, loans with fixed payments, can help raise your score if you manage the credit cards responsibly.

   

• Having many installment loans can lower your scores since payments remain the same until balances are paid in full.

   

• Don't open new accounts just to have several accounts or to attempt a better mix of credit.
  
• Closing an account doesn't remove it from your report. It may still be considered for scoring purposes.