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Best 10 Things You Can Do to Raise Your Credit Score

Updated on February 10, 2010

10 Clear, Concise Steps for Raising Your Credit Score

My goal in creating this guide has been to give ten concise, pointed pieces of advice, not just vague words of wisdom like "plan purchases carefully" or "design a budget." I wanted to give new, valuable information that could help consumers like you and me benefit from the powerful FICO score.



1. Don't Open New Cards and Don't Close Old Ones

A significant portion of your credit score is determined based on the average age of your credit history. A mistake that many people make as they try to consolidate debt is to close all accounts except one or open a new account with a low interest rate. Don't do either!

Consolidation is fine, but don't close the account. Instead, get that balance down to $0, and cut up the card or whatever you need to do so you won't use it anymore.

2. Don't Sign Up for Store Credit Cards

Apart from the impact of lowering your average length of credit history, retail credit cards have a negative impact on your credit history in and of themselves. Because department stores and the like desperately try to get every single customer to sign up for their credit cards, it doesn't say much to the credit bureaus that you were "qualified" for one.

3. Don't Fail a Loan Application

Do not apply for any loans you are not absolutely sure you can get, because every rejected loan application negatively impacts your credit score. Instead of going for that risky, great loan, settle for a less advantageous one. Reap the rewards of better interest rates for your higher credit score in the future.

4. Have Different Types of Credit

Even if you can pay it off now, consider taking out a small auto loan or home mortgage and then pay it off with timely monthly payments. Proving that you can successfully juggle many types of credit can do wonders for you credit score.

5. Pay Off All Uncollected Debt

Even if you are currently having a dispute with your lender over the validity of a certain charge, go ahead and make the payment now and ask for a refund later. All past-due, uncollected payments look bad on your credit report and negatively impact your credit score. Sadly, the lowered credit score will be your reality no matter how justified your dispute was, if you don't pay on time.

6. Ask Your Credit Limit to Be Raised

One ten-minute phone conversation with your credit card company can get your limit raised. This in turn increases your available credit, and lowers your debt ratio, which impacts your credit score positively. The goal is to have as much available credit and use as little of it as possible.

Would you spend the length of one phone conversation to save potentially thousands in the future from having a better credit score?

7. Minimize the Impact of Credit Inquiries

Every time you apply for a loan, the potential lender requests your credit report for review. While this always has a negative impact on your credit score, make all loan requests within a two-week time period. By doing this, the credit companies will only see one request, and not multiple requests. By careful planning, you can keep the consequences of applying for a loan at a minimum.

9. Don't Apply For Many Credit Cards at Once

A characteristic of irresponsible consumers, of people who are about to purchase a lot of products they can't afford, is to get many new credit cards at once and max them all out. The credit bureaus know this, and thus ding your credit score for each subsequent new credit card in a short period of time.

10. Avoid Credit Card Introductory Offers

Because lenders reward loyalty, switching credit cards too often has negative implications for your credit score. Every time you see a great interest rate and bonuses for switching to another company, consider the other financial implications: the extra money you will eventually have to pay for a loan/mortgage/car payment because of your lower credit score. Don't switch credit cards any more than you absolutely must.

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    • profile image

      Bad Credit Score 

      7 years ago

      People blame the banks and for sure they were wrong but at the end of the day it was people themselves that took out the mortgages so they must shoulder some of the blame too.

    • profile image

      mickbali123 

      8 years ago

      Hey, Thanks for the advice.

    • profile image

      Self Credit Repair Guide 

      9 years ago

      people should also set a budget and stick to it. Lack of financial control is what normally leads people to have to much debt and start missing payments. Once the payments are missed the credit score falls, its a vicious circle!

    • shunshifu profile image

      shunshifu 

      9 years ago from Valley Springs, California

      Hey Brittany,

      Another thing you can do to raise your scope is to opt out. There's a number you can call to do this I think it is 1 800 5 opt out. stops all the unwanted checks on your credit for promotional offers. I've heard it'll sometimes give you 30 points or so a couple months afteer using it.

      Phil

    • profile image

      Fix My Credit 

      9 years ago

      Taking out a small installment loan to cover the balances of your credit cards can be helpful, too.

    • profile image

      Crude Oil Trader 

      9 years ago

      Thought I knew it all. LOL I didn't realize the Department Store cards were a bad thing. I am trying to bring my score up right now and since I need a better variety of credit I was getting ready to apply for these types cards. Got me just in time.

      Great post!

    • profile image

      Credit Expert 

      9 years ago

      Another way to raise your score is to keep your balances around 30% of your total credit limit.

    • profile image

      wildstuff 

      10 years ago

    working

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