Raising your FICO credit score can be a very difficult and time consuming task, but its well worth it! I’ve compiled this list of eight things you should know on how to improve your credit score, but you must keep in mind that even if you follow these tips to the letter you will not see an increase in your credit score for at least a year, if not longer. It’s not easy, but it can be done.

So, without further ado, here are eight solid tips on how to improve a credit score:

  1. Pay your bills on time. Delinquent payments and being sent to a collections company can have a serious negative impact on your score. Be aware that paying off a collections company will not remove it from your credit history — delinquencies can remain on your credit report for up to seven years.
  2. Keep balances low on revolving credit (credit cards, etc.) or always paid off. High outstanding debts can have a large negative impact on your score, plus the longer a debt is outstanding, the more likely it is to have a large negative impact on your score.
  3. Don’t move debts around: pay them off! While some offers to move your account balance may seem nice, your total debt owed hasn’t gone down, and this can have negative impact on your score.
  4. Don’t open a lot of new accounts in a short period of time. New accounts can have a big negative impact on your score. Opening only one new account in a certain amount of time (usually six months to a year) can have far less of an impact on your score.
  5. Don’t constantly apply for new lines of credit. Each time you apply for credit the lender checks your credit history report, and each check has a slight negative impact on your score. Requesting credit in a large number of batches can have a large negative impact.
  6. You should have credit cards, but you need to manage them responsibly. Maxing out all of your available credit will have a negative impact on your score, but having multiple credit cards without a running debt can have a positive effect on your score.
  7. Ordering your own credit report online is OK, as long as it’s from the official credit agencies or one of their designated agents. Keeping track of your credit score (which you can get for free once a year from the three major credit agencies) is a good idea, so you can keep track of your score and remove any bad information.
  8. Contact your creditors or see a legitimate credit counselor if you’re having problems making ends meet. This probably won’t have a direct impact on your score, but over time — as you’re able to manage your finances better — you’ll slowly increase your score.

In short, the easiest way to improve a credit score is to be a responsible debtor and do what the lender wants you to do: pay your bills on time, every time.

[tags]credit card, credit score, FICO, improve credit[/tags]