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How Can I Improve?
- Pay your bills on time.
Delinquent payments and
collections can have a
major negative impact on
your score.
- If you have missed payments,
get current and
stay current. The longer
you pay your bills on time,
the better your score.
- Be aware that paying
off a collection account,
or closing an account on
which you previously
missed a payment, will
not remove it from your
credit report. The score
will still consider this
information, because it
reflects your past credit
pattern.
- If you are having trouble
making ends meet,
contact your creditors or
see a legitimate credit
counselor. This won’t
improve your score immediately,
but if you can begin to
manage your credit and pay
on time, your score will get
better over time. And you
won’t lose points for seeing
a credit counselor.
- Keep balances low on
credit cards and other “revolving credit.” High
outstanding debt can affect
a score.
- Pay off debt rather than
moving it around. The
most effective way to
improve your score in this
area is by paying down your
revolving credit. In fact,
owing the same amount but
having fewer open accounts
may lower your score.
- Don’t close unused
credit cards as a shortterm
strategy to raise
your score.
- Don’t open a number
of new credit cards that
you don’t need, just to
increase your available
credit. This approach could
backfire and actually lower
your score.
- If you have been managing
credit for a short time,
don’t open a lot of new
accounts too rapidly. New
accounts will lower your
average account age, which
will have a larger effect on
your score if you don’t have
a lot of other credit information.
Also, rapid account
buildup can look risky if you
are a new credit user.
- Do your rate shopping for
a given auto or mortgage
loan within a focused
period of time. FICO scores
distinguish between a
search for a single loan and
a search for many new
credit lines, in part by the
length of time over which
inquiries occur.
- Re-establish your credit
history if you have had
problems. Opening new
accounts responsibly and
paying them off on time
will raise your score in the
long term.
- Note that it’s OK to
request and check your
own credit report and
your own FICO score.
This won’t affect your score,
as long as you order your
credit report directly from
the credit reporting agency
or through an organization
authorized to provide credit
reports to consumers,
like the myFICO service.
For more information,
- Apply for and open new
credit accounts only as
needed. Don’t open
accounts just to have
a better credit mix—
it probably won’t raise
your score.
- Have credit cards—but
manage them responsibly.
In general, having
credit cards and installment
loans (and making timely
payments) will raise your
score. People with no credit
cards, for example, tend to
be higher risk than people
who have managed credit
cards responsibly.
- Note that closing an
account doesn’t make it
go away. A closed account
will still show up on your
credit report, and may be
considered by the score.
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