How to Raise a Credit Score Quickly With 5 Easy Steps

Raising your credit score is simple if you follow the rules.

A high credit score can help you with getting approved a credit card, increasing your credit limits, obtaining a low interest rate on your mortgage, preferred financing on your automobile loan and even good terms on a small-business loan. Whether you wish to maintain a good credit score or improve an existing one, FICO makes it very clear on which elements are used to calculate this number.

Things You'll Need

• credit report
• credit score

Instructions

1. Obtain your credit report. Before venturing out to improve your credit score, it is important to know your starting point. Order a copy of your complete credit report and score. You should review each account and see if the payment history, balance amounts, credit limits and comments match up with your records.

2. Dispute negative items. Negative items, such as excessive delinquent payments, chargeoffs, and collection records can have damaging impacts on your credit score. When you look at your credit report, note the negative items and see if there are any items that can be removed via a dispute process. If one creditor reported you as being late in your payments, but you can prove you were not, submit the dispute for removal.

3. Pay bills on time. Thirty-five percent of your credit score is based on your payment history. If you have a history of being late on your payments, commit to ending that behavior immediately. Over time, a consistent history of being on time with payments will boost your credit score and drown out the impact of older, negative comments and delinquent payment history.

4. Pay down debt. The second biggest factor in your credit score is how much money you owe, particularly as it relates to how much of your available credit limits you are using. This factor represents 30 percent of your credit score. Paying down your debt not only will reduce interest fees but also keep you away from over the limit fees and comments on your credit report.

5. Request new credit. Once you have taken care of the above items, do not be afraid to request new credit accounts or request credit line increases. More credit available means a lower debt to utilization ratio and more ways to spread your purchases over multiple accounts to avoid running one credit line to a high balance each month. In turn, this will help raise your credit score as creditors will view you as more creditworthy.

Tips & Warnings

• Many credit card issuers can raise your limit periodically with good payment history without doing a formal credit inquiry -- ask about this possibility with each issuer.

• Once you have reestablished a good payment history, ask your issuer to reduce your interest rates -- this will help with paying down debt.

• Consult a qualified, reputable credit counselor if you feel you need additional assistance.

• Avoid excessive requests to open accounts simultaneously -- each inquiry can reduce your score by a couple of points.

• Do not fraudulently submit dispute requests.

• Be cautious of firms that offers to fix errors on your credit score for a fee.

References

• Christian Science Monitor: Simple ways to raise your credit score
• MSNBC: How can I raise my credit score?
• CNN Money: 5 ways to boost your credit score
• MyFICO: Improving your FICO® credit score
• Forbes: How To Raise Your Credit Score