How do I raise my FICO score?

Question

I just checked my credit report and my score is 700...it WAS 725 a few months ago. How do I raise it??

Answer 1

You're on the right track getting your credit reports and credit score. Remember you're entitled to one free per year from each of companies, so that means you can get a free one every four months if you plan it right. You're also entitled to a free credit report from the reporting company that the card issuer used every time that you get turned down.

Make sure that everything is in order. Names (I was married over a year before my married name was on a credit report), addresses, accounts, limits. Correct anything that's wrong. For example, Capital One is known to report credit limits as $0, so your ratio of debt to credit limits gets skewed, making it look like you owe more than you can borrow. (Their excuse is that they consider your credit limit proprietary information, that could tell their competitors how they determine your credit limit in relation to your credit score.)

Keep making on time payments. That's got to be the #1 thing.

Then remember that if you make minimum payments on everything, it takes like 40 years to pay off a big credit card debt. Put as much as you can into the card with the highest interest. (Exception to this is if you have a card you can pay off in a few months.) Once the first debt is paid off, use the money you'd pay to that and add it to the payment of next highest.

Do not close any accounts. It's better to leave it at $0 owed than to close it. Even if you decide to chop up cards to not get in debt, it's best not to close the accounts because having accounts for a longer period of time increases your score.

Don't forget, though, PAY ON TIME. Using the internet to pay is normally a very good idea. No checks lost in the mail, no having to mail your payment a week before the due date. Just log on the weekday before, and it's on time.

Typically, I go to the web interface for my credit cards when I get a statement (they email me when they send it too, so I know it's out before it arrives at my house). On the day the statement is sent, I make the minimum payment. That means that even if I don't think about it again until they email me again, I've still made an on time payment. Then later in the month, normally after a paycheck, I make a further payment to each of them based on my long term debt reduction plan.

Ultimately, it's going to take time to raise your score. More on-time payments made, longer length of credit history, more time since any negative stuff. As long as you keep paying on-time (sensing a pattern yet?), your score should continue to go up. The only other major thing is to have a good debt to credit ratio (remember my Capital One comment above) and a mix of revolving and fixed credit. Two credit cards and a car payment is better than three credit cards, in other words.

Remember, your FICO score is based on:
* 35%, punctuality of payment in the past
* 30%, the amount of debt, expressed as the ratio of current revolving debt (credit card balances, etc.) to total available revolving credit (credit limits)
* 15%, length of credit history
* 10%, types of credit used (installment, revolving, consumer finance)
* 10%, recent search for credit and/or amount of credit obtained recently

Good luck!

(Edit: You checking your own score doesn't make it go down, nor does it show on your credit report. Only inquiries made by other people show up on your report.)

Answer 2

That's not a material difference. Maybe it went down because you checked your credit. Pay your bills on time. Don't cancel existing credit cards. Don't take on new ones. Steady as you go is the name of the game.

If you want to pay Fair Isaac, they will tell you 3 things you can do to raise your FICO score. But with a score at 700 you don't have to stress about it very much.

Answer 3

pay down the balances on your cards.