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Making payments on time to your lenders and creditors is one of the biggest contributing factors to your credit scores—making up 35% of a FICO Score.
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But, if you are able to keep up with your payments, this method can help you transition from no credit score to a decent one. If there are any errors on your reports, those could be dinging your credit score through no fault of your own. Reporting those errors can result in some big gains. Your payment history accounts for 35 percent of your credit score, so bring that score up by paying your bill in full, on time, every time.

While you want your credit score to be high, you want your debt-utilization ratio to be low. That ratio is the percentage of your available credit that you spend. Here are some tips to keep that ratio low:. Don't overspend, or use this as an excuse to take out loans you don't need. You could get a secured credit card, for example, and pay for gas and other regular expenses with it. To avoid paying high interest charges or building credit card debt, track your balance throughout the month and pay the balance off every month.

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If you have bad credit, bringing delinquent accounts current and settling accounts that are in collections can also boost your score fairly quickly. Once the creditor or collection agency reports your account update, you should see a positive bump in your score. Keep in mind, though, that your late payment history will remain on your credit report for seven years. If you have bad accounts that have been on your report for six years or more, you may not want to worry about settling them or bringing them up to date. This can re-age the account, and if you fall behind again, it will stay on your credit report for another seven years.

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Your credit utilization ratio refers to how much you owe compared with the amount of available credit you have. This drags down your score. Linda L.

Jacob , a financial counselor at Consumer Credit of Des Moines, IA, recommends paying down balances to below one-third of your credit line. Any payments you make will be reflected on your credit report as soon as your creditors report your payment to the credit bureaus. Scores are updated on an ongoing basis, and creditors typically report once per month, so if you make a payment that lowers your credit utilization, that should be reflected on your score within two months.

This ensures that your balance is as low as possible whenever your creditor reports your payment history to the credit bureaus. Consumers sometimes assume that by getting new credit, their score will improve. That's better, right? Not necessarily. You can try getting around this by asking a credit limit increase on a card you already have, instead of opening new credit.

Soft inquiries are for background purposes only. For example, a credit card company may do a soft pull to see if you're eligible for certain credit card offers, or an employer may do a soft pull before offering you a job. Soft pulls can be done without your permission and do not affect your score. Hard pulls require your permission, and are done when lenders or credit card companies are assessing whether to grant you a loan or line of credit.

Short-term damage control consists of correcting errors, settling your delinquent accounts, and optimizing your credit utilization to make your credit report look better.

How to Raise Your Credit Score - The Simple Dollar

Contrary to what some credit repair places promise, you can't delete genuine negative information from your credit history. The only other things that will improve your long-term score are time and building up a perfect or nearly perfect payment history, starting now.

For example, if you tend to forget to make payments on credit card debt, you can set up automatic payments. Is a point increase realistic? Rod Griffin, director of public education for Experian, says yes.


Simply continuing to polish your credit can make life easier, giving you a better chance of qualifying for the best terms on loans or credit cards. What's next? Want to take action?

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