Improving Your Score

It is important to note that raising your score is a bit like losing weight. It takes time and there is no quick fix. In fact, quick-fix efforts can backfire. The best advice is to manage your credit accounts and debts responsibly over time.

Payment History Tips

• 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 will not remove it from your credit report. It will stay on your report for seven years.
• 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.

Amounts Owed Tips

• Keep balances low on credit cards and other "revolving credit." High outstanding debt can affect your 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 card debt.
• Don't close unused credit cards as a short-term strategy to raise your score. In fact, owing the same amount but having fewer open accounts may lower 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.

Length of Credit History Tips

• If you have been managing credit for a short time, don't open a lot of new accounts 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 history. Also, rapid account buildup can have a negative effect on your score if you are a new credit user.

New Credit Tips

• Do your rate shopping for a loan within a focused period of time. FICO^® Insurance Scores distinguish between a search for a single auto or mortgage 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. 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 such as www.myFICO.com. FICO recommends that all consumers take advantage of www.annualcreditreport.com — the truly free source for credit reports.

Types of Credit Used Tips

• 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 monitor and manage them responsibly. In general, having credit cards and installment loans (and paying them back as agreed) will raise your score. National statistics shows that someone with no credit cards tends to present a higher risk for insurance loss than someone who has managed credit cards effectively over time.
• Note that closing an account doesn't make it go away. A closed account will still appear on your credit report, and may be considered by the score.