How Can You Raise Your FICO Score As Soon As Possible?

Fair, Isaac and Company developed the FICO score, a numeric score upon which many lenders make lending decisions. Based on such factors as how much credit a consumer utilizes and the amount of debt the consumer has, banks and others use a FICO score as an evaluation of risk. A person with a high FICO score will get the best interest rates on loans, while someone with a low FICO score may have trouble getting a loan altogether. Improving a FICO score as quickly as possible requires a concerted effort.

Instructions

1

Request a free copy of your credit report each year from the three credit reporting agencies to determine where you are at. The report contains all of the information used to figure your FICO score. Check your report to make sure everything in it is accurate and to protect against identity theft.

2

Make all of your payments on time. In calculating your credit score, about 35 percent is related entirely to your bill-paying history. Making timely bill payments for a few months will begin improving your score. Bills that go beyond 30 days late hurt your score. Late payments that exceed that point hurt your FICO score even more, and bills that go to collections are the worst of all.

3

Keep your credit history as long as possible. While you can't go back in time and open accounts earlier, you can extend your credit history by not closing old credit card accounts. Many credit card issuers will close your account if you haven't used it recently enough, so make it a point to pull out the card once a month and use it to make a small purchase. Then pay the balance right away. Doing so will lengthen your credit history and show that you use credit responsibly.

4

Use no more than about 30 percent of the credit you have available. If your credit limit is $10,000, for example, do not carry a balance of more than $3,000. Pay down your balances as much as you can, focusing first on revolving credit. Credit cards are a good example of revolving credit. This type of credit affects your FICO score more than installment loans, which consumers take out to buy cars, for example. Lenders pay particular attention to the amount of credit you use and view consumers who use a small percentage of what they have more favorably.

5

Stay in touch with your creditors, especially if you are falling behind on paying your bills. It does not take many missed payments to put a ding in your FICO score. Contact your creditors, and tell them why you are having trouble paying your bills. Since they want to ensure they are paid back, they will likely work with you to become current on your payments. Once you have asked for and received help, make sure to keep your account current. It will help your FICO score and reduce the amount you owe.