Following are some tips for reaching and keeping a good credit score. It’s important to note that raising your FICO® score is a bit like getting into shape: It takes time and there is no quick fix. Although it will take a while to get that “perfect” credit score, by following these good credit tips, you will be able to see small results, like an increase of a point or two, right away.
|Pay your bills on time. Delinquent payments and collections can have a major negative impact on your FICO® score.|
|If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your credit 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 credit score immediately, but if you can begin to manage your credit and pay on time, your score will get better over time.|
|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. The most effective way to improve your credit 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 your credit score|
|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.|
|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.|
|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 raise your credit score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.|
Source: “What Is a Credit Score?” My Credit Score: Understanding All 3 FICO Credit Scores. MyFICO, n.d. Web. 29 June 2015. <http://www.myfico.com/CreditEducation/CreditScores.aspx>.