Fast Ways to Clear Credit

Trying to boost your credit score is a great goal to go after, but do not expect much to happen overnight. The credit scoring formulas offer relatively few ways to clear your credit history of bad items fast. Most negative items stay on your report for seven years and some items remain indefinitely.

Pay Off Credit Cards

Credit scores factor in the amount of debt you owe, but also credit utilization---the portion of credit debt used as compared to available credit. Maxing out a credit card costs 10 to 30 points on an average score and a little bit less on a poor credit score, according to Bankrate. Thus, paying credit card debt improves two variables in the credit scoring model at once.

Disputes

A single negative item almost always tarnishes your credit report far more than a single positive item improves it. When you review your credit report and see a negative item, dispute it with the credit bureaus no matter how small. Individual hard inquiries---credit checks because you applied for credit---do minimal damage on their own, but become a very negative item once you have more than six on a report.

Add Credit Variety

You should have at least one credit card and one active installment loan on your credit file to increase your mix of loans, worth 10 percent of your credit score, according to Liz Weston of MSN Money Central. Holding two revolving accounts for every installment account usually gives the optimal mix of credit for most borrowers.

Old Credit Cards

Lenders stop reporting a credit card account to the credit bureaus if you do not use it. Thus, you should make a small purchase to make it active again. Also, ask your lenders for a higher credit limit to lower your overall credit utilization rate.

Warning

Stay away from self-proclaimed credit repair clinics; they cannot do anything for you. A credit repair company might even suggest illegal tactics, like using a fake Social Security number. Applying for credit under anything other than your Social Security number is file segregation and can be considered a felony.