How to Raise a Credit Score Quickly & Legally

A low credit score can make your financial life miserable. Borrowing becomes more difficult, especially for important purchases like a home or a new car. A low credit score even costs you money. If you do manage to arrange a loan, you will have to pay a higher interest rate. Although your credit score reflects your financial history over the long term, you can raise it quickly and legally.

Instructions

1




Find money to pay down your credit card debt.

Pay down your credit card debt. Kimberly Lankford of "Kiplinger" says this will help your credit score the fastest because a credit score derives about 33 percent of its value from the ratio of credit used to credit available. If you have a savings account, mutual funds or bonds, use some of that equity to pay off debt. If you don't have these assets, raise cash to pay off debt by holding a yard sale or selling surplus items on the Internet.

2

Improve your ratio of used to available credit by having your credit limits increased. If you have been paying bills on time, phone the banks and ask them to raise your limits. This will improve your ratio only if you avoid increasing the debt your carry.

3

Keep your monthly charges low whether or not you pay them off immediately. Liz Pullam Weston of "MSN Money" says even if you pay off the balance every month, huge charges will adversely affect your score.

4

Get a copy of your credit report and have errors against you removed. Weston says you should ask them to fix false reports of collections, unpaid accounts, late payments or low credit limits. However, because of a fluke in the scoring formula, removing outdated information (more than 7 years old) may help or hurt your score, she says.

5

Ask a lender to delete a single mistake from your history if you otherwise have a clear record. If your credit history reflects more than one problem in the past but you have had a good record for a year or more, ask your creditor for a favorable update to your credit history.

6




Manage your credit prudently.

Practice the same prudent credit management techniques in the short term that will produce a good score in the long term. Don't put all your balances on one card, apply for more cards than you need or ask lenders to lower your available credit. And of course, to raise your score and keep it high over the long term, pay all your bills on time. Then you will continue to enjoy the easier borrowing and better interest rates that come from a higher credit score.