How to Increase or Build Credit

Your credit history is a work in progress from the moment you get your first bank account, loan or credit card. Your financial moves continue to influence it as they show up on your credit reports with Experian, TransUnion and Equifax and affect your credit score. You can build a positive credit history and raise your score in various ways as long as you know which factors have the biggest effect.

Instructions

1

Use all of your credit cards. You don't have to maintain a balance on all of them. Simply make one or two small purchases every three to four months and immediately pay them in full to show some recent activity on all of your accounts. This is especially beneficial on your oldest accounts because it increases the length of your credit history, the credit score company FICO advises.

2

Send your payments early enough to ensure they will be credited to your account by the deadline, or transfer the money electronically a few days ahead of time. FICO states that your payment records account for 35 percent of your credit score. It can climb significantly if you build an on-time payment record on all your accounts.

3

Refrain from running up balances that are close to you total credit limits on your revolving accounts. FICO explains your ratio of available and used credit is considered when calculating your score. It will be pulled down if you have very little available credit because your balances are so high.

4

Maintain a balance between fixed and revolving credit lines. The best way to build credit is to have fixed loans like an auto loan, personal loan or mortgage as well as revolving accounts like credit cards or department store accounts, according to FICO.

5

Open new accounts slowly. FICO warns against opening many accounts all at once, especially if your credit history is relatively new. Your score will take a hit because of all the lender inquiries, and creditors might think you are high risk because you are rapidly adding credit lines.