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, says Sprauve.

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 can hurt you more than they can help you," Sprauve says. "Don't believe anyone who tells you otherwise."

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

"Closing an account can turn your credit utilization upside down if your remaining accounts have a shorter history and higher balances," he says. "Pay off the balance and hide the card from yourself 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.

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