How Can You Increase Your Credit Score Immediately?

If you're being turned down for loans or credit cards, the problem may be that your credit score is too low to qualify. The first thing to do is request a copy of your credit report. You are allowed a free copy from each of the credit reporting agencies annually. Once you know where you stand, you can begin to make positive changes in your score, including some that can be made very quickly.

Check the Credit History Information

Make sure that your report reflects your most recent information. You might see that the credit limits showing for your credit cards don't reflect increases that your credit card companies added to your accounts. Your report also might not show balances that you have paid down recently. Either of these items will make it appear as if you are carrying a higher level of debt than you are, and you can easily correct either problem with a phone call to your credit card issuer.

Decrease Your Debt-to-Credit Ratio

Ideally, if you have a lot of credit and no debt, lenders will be more willing to lend to you because it doesn't seem likely that you will overextend yourself. The two ways to work toward this ideal are to pay off your existing debt and open additional credit lines. With the second way, although you are opening additional credit accounts, you don't need to use them. That would just add to the debt. When those cards come in, simply put them aside or even cut them up. Your goal is to decrease your debt-to-credit ratio, not increase your debt.

Use an Old Card

An account that has been open for years reflects favorably on your credit score. However, if the account is an old one that you don't use because it is paid off, the credit card issuer may decide to close it or stop updating it for your credit score. If this happens, you lose the benefit of having the old card. So consider having a regular monthly bill charged to your old account and pay it off each month. This keeps the account active so you get the benefit of an old card and the amount charged doesn't show on your history because you pay the balance off each month.

Avoid Negative Actions

There are some things you shouldn't do when trying to improve your credit score because doing so can hurt your credit score, if only temporarily. Don't consolidate your accounts or apply for new credit accounts if your debt is less than 30 percent of your total credit. Inquiries by lenders into your credit history will pull your credit score down temporarily and if your debt-to-credit ratio is already low, you really won't get any benefit from opening additional accounts.