FICO Score Improvement Plan

Fixing a poor FICO credit score requires a plan of attack. Bad credit can follow you through life and cause problems when trying to finance a home or automobile. There are tips to help improve your credit rating. But achieving this goal involves adhering to your chosen strategy.

Keep Bills Current

Defaulting on your credit cards and loans is guaranteed to ruin your FICO credit rating. You need to keep a good relationship with your card companies and lenders. This can include consistently paying your bills on time, and if you have accounts that are past due or in collection status, make arrangements to bring these accounts current to help repair a bad credit rating. Don't miss payments because of cash flow issues. Contact your creditor, make the creditor aware of your situation and ask for an extended due date.

Limit Debt

Try to get rid of consumer debt as part of your plan to improve your credit score. Debts owed on your credit accounts have a major bearing on your credit score. Someone with few debts is likely to have a higher score than someone who uses the maximum amount of credit available on his credit cards. Stop using credit cards and increase monthly payments to reduce your balances. Ultimately, you should pay off the balance.

Piggyback on Another Account

A short credit history or no credit history also impacts your FICO score negatively. Piggybacking on another person's good name by asking him to add your name and Social Security number to one of his credit cards helps build your credit rating. For this method to help your FICO score, the person chosen must have a good credit rating and a long credit history. The person's account on which you are included will appear on your personal credit file. Piggybacking builds a strong credit rating as long as the account remains in good standing. Because the primary account holder makes payments on the account, you need to select someone who's responsible and pays his bills on time. Monitor your credit report, and if the primary account holder starts to miss payments or send in late payments, remove your name from the account.

Dispute Delinquent Accounts

Sometimes, collection accounts unknown to you may appear on your credit profile. Don't ignore these entries. Contact the reporting collection agency in writing and ask them to send proof that you owe this money. By law, collection agencies have to forward the requested proof. If they are unable to supply proof, they have to delete the collection account from your credit report. Also, if you notice other errors or unfamiliar information on your credit report, contact your creditors to dispute the update.