credit

Tips for boosting your credit score

What you're looking for on your report are factors that could be affecting your score. Look for errors in the report, such as accounts that aren't yours, late payments that were actually paid on time, debts you paid off that are shown as outstanding, or old debts that shouldn't be reported any longer. (Negatives are supposed to be deleted after seven years, with the exception of bankruptcies, which can stay for as long as 10 years.)

After repairing errors, the fastest route to a better score is paying down balances on credit cards.

Though it's not an instant cure, paying down credit lines over a two-month period can boost your score a substantial amount, and may be enough to put it over the edge if you're lurking just beneath the next tier of loan pricing.

Had a few late payments in your past? Even if you've paid your bills late in the past, you can improve your credit score by paying every bill on time and keeping balances low from now on.

A big no-no

One thing you shouldn't do if you're just trying to boost your score is close unused accounts.

"Closing unused credit card accounts may not help you improve your FICO score," Scott says.

Closing unused accounts without paying down your debt may increase your utilization ratio, which is the amount of your total debt divided by your total available credit.

"It may be more beneficial to pay down your revolving balances," Scott says. "You can also take a credit card out of your wallet and put it in a drawer to avoid the temptation to use it."

If you do cut up your cards, though, leave the oldest one open, says Steve Rhode, consumer debt expert with GetOutOfDebt.org.

The length of your credit history is another factor in your score. If you close the account of the credit card you got when you were a freshman in college and leave open the ones you just got within the past couple years, it makes you look like a much newer borrower.

"Keep a couple of the oldest open; I don't care what the interest rate is," he says. "Creditors don't care what the rate is."

Working with credit card balances

Another strategy for bringing up your score: Transfer balances from a card that's close to being maxed out to other cards to even out your usage, says David Chung, managing director for Maryland-based CreditXpert Inc., which provides credit tools to lenders. Or just spread out your charges between a few cards.

advertisement

Show Bankrate's community sharing policy
          Connect with us
Product Rate Change Last week
Balance Transfer Cards 16.12%  0.05 16.07%
Cash Back Cards 16.45%  0.01 16.44%
Low Interest Cards 11.23%  0.02 11.21%
 
Search
advertisement
CREDIT CARDS WEEKLY NEWSLETTER
Credit cards on a table

Get advice for managing credit cards, building your credit history and improving your credit score. Delivered weekly.

advertisement

Credit Card Blog

Jeanine Skowronski

Credit bureaus to change ways

The three big bureaus will pay a fine and change how information is added, reviewed and removed from credit reports.  ... Read more

Partner Center
advertisement

Connect with us