1.Make Payments on Time.
The single most important thing you can do to keep your score high, or improve upon your score is to make your payments on time. Payment history is the largest factor used to determine your credit score. Payments that are 30 days or more past due will show up on your credit report and negatively impact your score. These negative items generally stay on your report for seven (7) years.
2.Dispute Errors and Inaccuracies.
According to recent studies as many as 80% of consumer credit files contain errors. That means that 80 out of every 100 Americans have inaccuracies on their credit report. Chances are you might be 1 of those 80. Inaccuracies, especially ones that are harmful to your credit scores, can lead to higher interest rates on loans and credit cards or denials for new credit.
After you've obtained a copy of your credit reports review them carefully to identify any items that are negatively impacting your credit score and highlight everything you believe to be incorrect, inaccurate, errors or obsolete, These could be inaccurate or outdated accounts, unauthorized inquiries, collection that are not yours, duplicate derogatory accounts and outdated or unknown public records and accounts listed as "settled," "paid derogatory","paid charge-off" or anything other than "current" or "paid as agreed" if you had in fact paid on time and in full.
3.Make Sure Proper Credit lines are Posted on Your Credit Reports.
Often, in an effort to make you less desirable to their competitors, some creditors will not post your proper credit line. Showing less available credit can negatively impact your credit score. If you see this happening on your credit report, you have the right to complain and bring this to their attention. If you have bankruptcies that should be showing a zero balance make sure to they show a zero balance! Very often the creditor will not report a "bankruptcy charge off as a zero balance until it's been disputed.
4.Pay Down Debt and Don't Max Out your Credit Cards.
The second largest factor impacting your credit score is how much you owe. This accounts for 30% of your score. The more you owe, the lower your score will be. Someone who owes $30,000 is riskier than someone who owes only $1000, all else being equal. So a great way to increase your credit score is to pay down as much debt as you can. Another factor in the credit score formula is whether you use most or all of the available credit on any given account. The theory is that if you max out an account, it may reflect some financial difficulties that could increase your risk of default.
5.Keep Old Positive Accounts Open.
Length of credit history is another important credit score factor, so it can be to your advantage to keep open older accounts that are in good standing. While it is important to keep the total number of open accounts manageable, it may be more hurtful to your score to close an old account than to keep it open even though it increases the number of open accounts.
6.Keep Revolving Accounts Open.
It is very helpful that you maintain a variety of credit accounts.If you do not have four active credit cards, you might want to open some. If you have poor credit and are not approved for a typical credit card, you might want to set up a "secured credit card" account. A secured credit card requires you to make a deposit that is equal to or more than your limit. This guarantees the bank that you will repay the loan and is an excellent way to establish credit.
7.Use Caution When Applying for New Credit.
Every time you apply for a credit card, line of credit, or other loan, an inquiry is made to your credit report. While new credit is the least important factor in your score, it is still an important issue to consider. When you are shopping for a new loan or credit card, do your shopping in a relatively short period of time. So to avoid these inquiries, apply for new credit only if you must.
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