Secrets to Boost Your Credit Score

While different formulas exist for calculating your credit score, all credit scoring algorithms use the current and past account information contained within your credit report to determine your credit rating. Your credit score will naturally improve over time if you practice good debt management habits and pay your creditors in a timely manner. There are, however, actions you can take to boost your credit score more quickly.

Increase Credit Limits

If you carry credit cards or other open lines of credit that appear on your credit report, asking your creditor to increase your credit limit has a positive effect on your credit scores. Your credit utilization ratio -- the amount you owe on your credit lines as opposed to your spending limit -- is one factor the credit bureaus consider when determining your credit score. The greater the difference between the two numbers, the better your credit rating.

To glean the greatest benefit from a higher spending limit, simultaneously pay down your balance. This further increases your credit utilization ratio -- improving your credit score.

Write Goodwill Letters

Making a single payment 30 days late to one of your creditors can cause your credit score to drop by 100 points or more, depending on your current credit rating. Fortunately, creditors have the ability to amend negative reports they file with the credit bureaus. Unless you ask your creditor to do so, however, it has little incentive to help you boost your credit score.

A goodwill letter is a formal request to a creditor to delete its late payment notations from your credit record. While your creditor may not amend your files in response to a goodwill letter, you have a higher chance of success if your late payment was an isolated incident and you are a longstanding customer.

Delete Obsolete Information

The Fair Credit Reporting Act holds each credit bureau responsible for deleting information from your credit record once that information becomes obsolete -- usually after seven years. Oversights on the part of the credit bureaus when deleting negative credit information aren't uncommon and can result in your credit score reporting as much lower than it should be. Check your credit reports for derogatory accounts, such as charge-offs and collection records, older than seven years. Dispute any obsolete information you find for a boost to your credit rating. Should you come across any other reporting errors when reviewing your file, you can dispute those as well.

Add Positive Information

Landlords and utility companies do not always report positive accounts to the credit bureaus -- but that does not mean that they cannot do so. Ask your utility companies or landlord to report your positive payment history on your credit report. The more positive accounts that appear on your credit report, the higher your credit score will climb.

If your landlord or utility companies cannot report your payments on your credit report, you can also add positive payment history by asking a loved one with good credit to add you to his credit card account as an authorized user. Once added, your loved one's beneficial payment history appears on your credit report and the credit bureaus will factor it into your overall credit score.