How to Improve a Credit Score by Adding Accounts

Your credit score is calculated by a variety of different factors. How long you have had credit, your payment history on your accounts and the types of debt you carry all contribute to your credit score. The two types of debt you need to balance in order to accrue the most points every month are revolving debt, such as credit cards, and installment debt, such as loans. The types of debt you carry on your credit report account for 10% of your credit score. If you do not currently have a good balance of revolving and installment debt, applying for a credit card or a loan can make up for the deficiency and boost your credit score.

Instructions

1

Check your credit report to see which types of debt are currently being reported. One installment debt is plenty, but while one credit card is enough, it is not the ideal. Two or three credit cards and one loan will provide you with the perfect balance of debt to build a good credit history and a score you can be proud of.

2

Apply for a credit card if you are lacking in revolving debt. Choose your card carefully. Some credit cards come with high interest rates and fees that you can easily avoid with a decent credit score. Only apply for credit cards when you are reasonably certain you will be approved. Each time you apply for credit, your credit report is pulled and reviewed by the lender. This leaves a credit inquiry on your report. Credit inquiries bring your score down slightly. Applying for numerous cards within a short time frame can damage your credit score.

3

Apply for a small personal loan from your bank if you need evidence of installment debt. If you have good credit, this should be a simple process. If, however, you are just starting out with your credit or have made credit mistakes in the past, you may need to provide the bank with extra incentive to approve your loan. Offering collateral by borrowing against funds you already have in the bank is one way of making yourself a lower risk. You can also boost the chances of your application being approved by enlisting the aid of a cosigner with established credit. Numerous credit inquiries for loans within a 30-day time period will not damage your credit score the way credit card applications will, so you may apply at several banks if you need to.

4

Wait at least four to six months for your new credit to become established. You may not see a significant increase in your credit score for several months, but paying all of your debts in a timely manner and carrying the proper balance of revolving and installment debt will benefit you. After 60 days you should begin to notice a steady increase in credit points. After six months, your new credit should be fully established, and your credit score will be much higher than it was when you began the process.