How to Boost Your Credit Score

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Written by Matthew Erme

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For the longest time, the word "credit" has made people's skin crawl. The word "credit" does not bring us fond memories, remind us of opportunities taken, or let us take pleasure in our instant boost in funds. Instead, it reminds us of debt, limitations, and doomsday (also known as the day you view your balance). Well, the word "credit" is mentioned several times below, but only to help you not let it get the best of you, and help you get the best of it.

Step 1

Always pay your bills on time. This seems intuitively obvious, but it bears reminding. Otherwise, we wouldn't have a credit problem now, would we? Payment history alone comprises 35% of your score. This is the most significant and wisest thing you can do. If you happen to be behind, catch up and stay up.

Step 2

Increase the length of your credit history. This accounts for 15% of your score. A sure way to hurt your score is to cancel an old card or suddenly take on a lot of new credit in a small time frame because it lowers the overall age of your accounts. Contrary to popular belief, you do want credit companies and potential lenders to see your history (a history of paid balances).

Step 3

Keep your credit card balances to a minimum. Again, seems obvious, but how enormous or miniscule your balance is accounts for 30% of your score. It would be best to work to keep the amount you borrow below 25% of your available credit. Even if you're good about paying off your cards at the end of the month, credit companies and potential lenders will see whether or not you are a big spender, which may make them uncomfortable.

Step 4

Keep new credit requests low. This makes up another 10% of your score. It is always a "turnoff", for lack of a better term, to credit card companies and potential lenders if your history says you've constantly been asking for funds, and a lot of funds at that. Remember this: if a potential lender asks for a copy of your credit report, an inquiry is recorded. Do not apply for new credit cards just before applying for a loan. Never make such applications close together.

Step 5

Maintain different types of installment and revolving debt. This makes up the last 10% of your score, and depends on what type of credit you use. How you handle credit cards (revolving debt) usually matters more than car loans or mortgages (installment debt).

Tips & Warnings In conjunction with step 4, you can ask the three major credit reporting agencies- Experian, Equifax, and TransUnion- to stop unsolicited credit offers. Try to keep credit card purchases low. This makes what you spend easy to pay off (step 1), resulting in a lower monthly balance (step 3). Also, you'd be spending less because of the small nature of your purchases; less spent = less needed = less wanted (step 4). Be sensible, please! Credit cards can be dangerous, but necessary. Never spend during the month what you doubt you might have at the end of the month.

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Comments (14)

lighthouse1958 said:

	... Very good information to know how to boost your credit score. 5*
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September 11, 2009
Votes: +1

mrdprince said:

	... Good info for those who are not already aware.
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September 12, 2009
Votes: +0

farmerdw02 said:

	... Very nice information and good tips. Darrell
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September 12, 2009
Votes: +1

Sunflowergiraffe said:

	... Thanks for the great information in "How to Boost Your Credit Score!"
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September 12, 2009
Votes: +1

anointedtoday said:

	... Good article.
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September 14, 2009
Votes: +1

Darlene said:

	... Really fantastc aritcle, my medial really destoryed my credit. I will try some of your advise, and Thank YOU
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September 21, 2009
Votes: +1

glennmosser said:

	... great article, the advise is great! keep them coming. Glenn
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September 24, 2009
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lighthouse1958 said:

	... Very good, I just had to read it again to make sure I wasn't missing anything. Keep them coming. 5*
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September 29, 2009
Votes: +1

cynthiantristan said:

...
This is a very well written article and detailed as well. I have been doing a lot of studying and research in regards to good credit in the past when I was in a deep debt situation, which I am glad to say right now, that I am free from it all. I just wished I had all this information back then in one article. I literally, had to go to different sites to put all the pieces together and you just gave it to us in one article. Thank you for sharing this with us and keep writing.