14 tips to improve your FICO credit score

Trying to raise your FICO credit score is like getting into good physical shape...it takes a bit of time and you won't see results immediately. But, a bit of time and work will pay off.   

An excellent FICO credit score will allow you to get the lowest interest rates on loans of all types, including auto loans and mortages.  And, likewise, a poor or low FICO credit score can cause you to either pay a high interest rate, or maybe not even qualify for a loan at all.

While there's no quick fix to raise your score, there are steps you can take that will improve your FICO score...we've listed 14 of the top tips here, in several categories:

Top Ways to Improve your FICO credit Score: 14 Tips

 

Payment Tips

 

1. Pay your bills on time.
   Delinquent and past due payments orcollections have a major negative impact on your FICO score.
2. If you've missed payments, get current and stay current.
   The longer you pay your bills on time, the better your credit score will be.
3. Paying off a collection account will not remove it from your credit report.
   It stays on your credit report for seven years.
4. Having trouble making your payments? Contact your creditors yourself or see a legitimate credit counselor.
   It won't improve your credit score quickly, but if you start to manage your credit and make on-time payments, your score will improve over time.

 

Outstanding Balance Tips

 

5. Keep balances low on credit cards and similar credit accounts, like furniture store payments.
   High outstanding debt will affect your credit score.
6. Pay off debt...don't move it around.
   Consolidating once is okay, but don't pay one card with an advance from another card.
7. Don't apply for new credit cards that you don't need.

 

Length of Credit History Tips

 

8. 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.

 

New Credit and Loan Tips

 

9. Do your rate shopping for a given loan within a short period of time.
   FICO algorithms distinguish between a search for a single loan and a search for many new credit lines, partially by the length of time over which the credit inquiries happen.
10. Re-establish your credit history if you've had problems in the past.
    Opening new accounts responsibly and making timely payments will raise your credit score over time.
11. Note that it's perfectly fine to request your own credit report.
    This won't affect your score, as long as you order your credit report directly from the credit reporting agency or through an authorized consumers credit report service.

Credit Usage Tips

12. Apply for and open new credit only when needed.
    Don't open accounts just to have a better credit "mix" - most likely, it will not raise your credit score.
13. Have credit cards - but manage them responsibly.
    In general, having credit cards and installment loans, and paying them on time, raises your credit score. Someone with no credit cards, for example, is viewed as a higher risk than someone who has managed credit cards reasonable well for more than a year.
14. Closing an account doesn't make it disappear.
    A closed account still shows on your credit report, and is considered by the score.