How to Raise a Credit Score by 50 Points

Perhaps you have gotten into financial difficulty and your credit score is a little worse for wear. Or maybe you have okay credit, but you would like to see it improved. According to a recent federal study, more than 30 million people have credit scores that are under 620, and they are considered risky by many lenders. Having less than perfect credit, these people have a problem getting loans or credit cards; and when they do, the interest rates are higher than if they improved their credit scores. Read on if you'd like to raise your credit scores by 50 points.

Instructions

1

Find out your credit score before you do anything else. Although the law states that you can check your credit file once every year, it says nothing about learning your credit score, a complicated algorithym created by Fair Isaac Company (FICO) that each of the three credit bureaus use. Go to MyFICO.com to get your FICO score (see Resources).

2

Be smart in how you use your credit cards. If you generate big balances on any of them, even if you pay them off every month, your credit score will be negatively affected. Keep your balances below 30 percent of the limits set on your cards and you will see an almost immediate improvement in your credit score. That means that you should pay down those credit card accounts that are closest to your limit, not just those that have a large balance.

3

Start using your older credit cards because the longer your history of good credit, the better your credit score will be. Better yet, periodically charge a reasonable amount to your older cards and pay them off when your statements arrive.

4

Beg a creditor for forgiveness. If you have been unavoidably late in making a payment, you could get a "goodwill adjustment" if you ask for it in writing. You'll stand a better chance that will happen if you have a good record. Or else, a creditor may erase those pesky delinquencies if you agree to make payments on-time in the future.

5

Make sure that errors in your credit reports are corrected. About one in four credit reports has erroneous information that can affect a credit score. In fact, each of the three credit bureaus must consider all errors brought to its attention in writing, according to federal law. The errors frequently made include late payments, collections or other negative information that don't belong to you. Another frequent error is under-reporting credit limits. All things negative must be erased from your credit history in 7 years (10 years if you've declared bankruptcy).

6

Avoid making mistakes, such as asking a creditor to lower your limit, and avoid making late payments, which is a sure way to lower your credit score. Do not apply for new accounts because that, too, will affect your score.

7

Do all the things mentioned above and you will begin to see your credit score going up. Remember, though, that a 50 point increase is fairly easy to accomplish if you began with a low credit score. If you are simply polishing a good credit history, you may find it more difficult to do.