Fastest Ways to Increase a Credit Score

Before you apply for a major loan, such as a mortgage, you want to get your credit into the best shape possible. Even a difference of a few points can cost you hundreds or thousands in interest over the lifetime of your loan. It's a simple fact -- those who have a higher credit score are eligible for the best rates. Quickly increase your score if you want a better deal.

Fixing Errors

Comb through your credit report at each of the three bureaus -- Experian, Equifax and TransUnion -- and look for errors. You may notice an account that you've closed is still open or that your credit card company isn't correctly reporting your credit limit. Contact the credit bureau to notify them of the mistake, providing proof whenever you can. The company must respond within 30 days of receiving your letter.

Increasing Credit Limits

The credit bureaus partially base your credit score on your debt to credit ratio -- the amount of debt that you owe as a percentage of the amount of credit you have available to you. While you may not be able to pay off your debts, you can improve your debt to credit ratio by asking for a credit limit increase. Before you do this, though, ask the company if it will trigger a look into your credit report, which can decrease your score.

Dealing With Negative Marks

Paying on time plays a large role in your credit score. If you have a few late payments showing up on your report, you may be able to have these removed by talking with the company that reported it. Explain that you are a good customer who made a mistake in the past and that you would like the company to remove that information from your report. Though this doesn't always work, in some cases, the company can erase that late payment.

Paying Off Collections

Having a collections notice on your credit report can decrease your score. If you pay it off, though, it will show that you've paid it, which can help your credit score. Negotiate with the collection agency and stress that you want them to report to the bureaus that you've "paid as agreed."