Quick Ways to Increase a Credit Score

Lenders look at your FICO credit score to determine how much of a credit risk you are when they are deciding whether to offer you credit. If you are planning to apply for a mortgage or another type of loan soon, you should try to increase your credit score as much as possible before applying. Increasing your credit score can lower your interest rate and save you thousands of dollars over the life of the loan.

Pay Down Balances

Part of the credit score formula includes your utilization ratio, which is the ratio of your credit card balances to your credit card limits. Decreasing your utilization ratio increases your credit score. MSN recommends paying down the balances on your credit cards to get all the card balances below 30 percent of each card's limits. Paying balances even lower can increase your credit score more. If you have money in savings for an emergency, consider using it to pay down your credit card balances, and plan to replenish your savings with the money you would have spent on credit card bills.

Activate Dormant Accounts

If you have not used your oldest credit cards in a while, the credit card companies may have stopped reporting your account information to the credit bureaus. Get the accounts back into active status on your credit report by making a small charge on each card and paying it off when the bill comes. This will update your payment history, account ages and total available credit to get you the best score possible.

Check Credit Report

Get a copy of your credit report so you can see the things that are dragging your credit score down. Look over the report for any errors, such as credit card limits being reported as lower than they actually are. If you have any current missed payments, get up to date on those accounts. If you have a late payment on your report for an account for which you have otherwise been a perfect customer, call the lender and ask for a goodwill adjustment to remove the late payment from your report.

Rapid Rescoring

Agencies that specialize in rapid rescoring can fix errors on your credit report within as little as 72 hours if you provide the proper documentation. Although you can do the process yourself, it will typically take you months to fix the error, which may be too late to affect the interest rate on your loan. Individuals cannot work directly with rapid rescoring agencies, so if you see an error on your credit report, ask your lender or broker for help with rapid rescoring.