How Can I Raise My Credit Score?

If you have asked yourself the question “how can I raise my credit score?” you are certainly not alone. Over 30 million people in the United States have blemished credit records and scores that fall below 620. There are a number of things that can be done to help raise your overall credit score, but they will take honest effort and will likely require a change in lifestyle.  An important caveat:  while nobody except the people at Fair Issac know exactly what goes into determining your credit score, there are some well-known guidelines that, if followed, will get you 98% of the way there.  MyFico.com is the quickest and easiest way to get your actual Fico Scores/Reports.

First and foremost, the easiest way to improve your credit rating is to reduce the amount that you owe to your lenders. One of the most important factors in calculating your score is the ratio of your debt in relation to your available credit. Even if you have credit cards with relatively low limits, your score can be adversely affected if you carry a balance of more than 30% of your available credit. Even though it makes more financial sense to pay off the highest interest balances first, it may be in your best interest to pay off the cards that are closest to their limit. Establishing a gap between the money you owe and the money you have the opportunity to borrow can make a significantly positive impact overall.

Use your cards lightly, even if you plan to pay them off in full each month. Many card issuers report your balance at the end of the month. If you pay off your balance in full, but continue to rely heavily on your card each month for routine purchases, it may look like you are continuously running a high balance on your card even if that is not the case.

It is also a good idea to use some of your oldest credit cards on occasion, even if they are not the most competitive ones that you own. The older your credit history is the better off you are. If you allow a card to go unused for too long, it might lose its value in relation to your score. Charge a small amount and then pay it off in full to ensure that the activity is reported regularly on your behalf.

Checking your credit report is a key step towards improving your score as well. It is important to regularly review the information that is on file with the three major agencies for accuracy. Incorrectly reported information can have a negative impact on your overall score unbeknownst to you if you aren’t diligent.