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11 Tips to Improve Your Credit Score

FAST!!

The first thing to do is get a copy of your credit report fromAnnualCreditReport.com. The three major credit-reporting bureaus must give you one free copy per year. At AnnualCreditReport.com you can get your credit report from all three credit reporting agencies

Then use one or more of the following tips to boost that three-digit number that has increasing power over our everyday lives.

1. Dispute errors

Mistakes happen.You can dispute errorsonline throughEquifax, ExperianandTransUnion

You cant deny that you stopped paying a credit card bill when you were unemployed last year. But youcanask creditors to erase that debt or any account that went to collection. Write a letter offering to pay the remaining balance if the creditor will then report the account as paid as agreed or maybe even remove it altogether. (Note: Get the creditor to agree in writingbeforeyou make the payment.)

2. Negotiate

3. Just Ask

You might also be able to ask for a good-will adjustment. Suppose you were a pretty good Visa customer until that period of unemployment, when you made a late payment or two which now show up on your credit report. Write a letter to Visa emphasizing your previous good history and ask that the oopsies be removed from the credit report. It could happen.

Having one or two pieces of plastic will do good things to your score ifyou dont charge too much and if you pay your bills on time. In other words, be a responsible user of credit.

4. Get a credit card

Cant get a traditional card? Try for asecured credit card, taking care to choose one that reports to all three major credit bureaus.

5. Become an authorized user

This means convincing a relative or friend to be added to his or her existing credit card account. If youve had a checkered financial history, dont be surprised if you hear the word no a lot. But you might luck out, especially if youre a young person who has no history of poor credit use.

Offer to put an agreement in writing stating how much you can spend and how you will get your share of the bill to the cardholder. Then do your part and use the card responsibly, in other words, dont buy more than you can afford and dont leave your co-signer hanging when the bill is due. The point is to learn to use credit responsibly.

6. Under-use your cards

Yes, I did just tell you to get credit by any means possible. But dont whip out the plastic to pay foreverything!! The credit utilization ratio should be no more than 30% of your available credit being used, and ideally even less. A 10% credit utilization ratio will maximize this part of your FICO score.For example, suppose your MasterCard has a $1,500 limit and you routinely charge a grand a month. It doesnt matter if you pay it all off before its due. What matters is the credit bureaus think Curtis is using two-thirds of his credit! What a spendthrift!!!

7. Raise your credit limit

Ask your creditors to increase your limit, i.e. making that MasterCard good for up to $3,000. Be careful with this one, though: It works only if you can trust yourself not to increase your spending habits accordingly. Otherwise youll be right back to using 66% of your credit each month and how will that look???

8. Dont close any cards

Canceling a credit card will cause your available credit to drop, which doesnt look good to a bureau. One way to keep a card active is to use it for a recurring charge such as a utility bill. Theres room for that in your budget, right?

9. Mix it up - Have an installment loan on record

Using a different kind of credit can make for a modest boost to your score. For example, you might take out a small personal loan from the credit union or buy a piece of furniture or appliance on installment (but only if youre 100% sure you can and will meet the payment schedule).

10. Pay your bills on time

Seriously. Your payment history including the ones you pay late or skip altogether makes up a whopping 35% of your FICO score. If youre absent-minded or merely overwhelmed (Hi there, parents of young children!), then for heavens sake, automate your payments. Even better than paying on time is to

11. Pay your bills twice a month

Using too much of your credit limit at any given moment doesnt look good. Suppose your limit is $3,000 and a months worth of havoc (car repair, doctor bills, plane ticket for kid to get to college) means youve charged up $2,9000. Sure, you plan to pay in full by the 18thof the month but until then it looks like youre maxing out yet another card.

Instead, make one payment just before the statement closing date and second one right before the due date. The first will likely reduce the balance that the credit bureaus see and the second makes sure you wont pay interest or a late fee.

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