What are some ways to raise my fico score?

Question

any information would be great :)

Answer 1

Posters #1 & 2 made some good points, while #3 not so good. But in order to raise your score, it would help to know what makes up your score.

Payment history-35%
Total debt owed vs. avaiable credit-30%
Length of time establishing credit-15%
Types of credit established-10%
Inquiries and new accounts-10%

With that said, here's some things that you can do to raise your score.

1. Check your reports for innaccuracies. Credit bureaus are NOT perfect. They don't get paid enough to be. There's a good chance that your score could be suffering for no additional reason at all because of a mistake. If you do find one, dispute it with all 3 agencies.

2. Make sure that you pay on time. This is the single-most important thing when it comes to building credit. Like Bdancer said, it can take anywhere between a year up to 2 years of continuous on time payments to make a difference in your score. If you have accounts that are about to go to collections, make arrangements before they do, and if you have items already in collections. Try to negotiate paying them off in return for removing it from your report. This is called a "pay to delete". The collectors are not obligated to do this, but it can be done if you're able to talk to the right person. Keep in mind a few things when doing this, when doing pay to deletes depending on how old the debt is, can in some cases require you to pay the full amount, so be prepared to to have the money upfront to do it. Also, if you are able to get them to agree to it, make sure that you get them in writing on something with their company letterhead stating the terms of the deal before sending them a penny. Have them not only fax you a copy, but also send one certified mail as well. It would be a major help to your score and your report if your able to do this, as just paying them off doesn't help your score anywhere near paying them off and getting it removed from your report like it never happened.

3. On the active accounts you do have, you should make sure that you're paying on time. It's important that you get the balances on all your credit cards down to 25-30% of the combined credit limit. This is the 2 most important factor of your score. It's important to create a large cushion between the total debt you owe and the available credit you have. The best way to use credit cards is to make small purchases that can be paid off on time every month. This not only shows activity and build credit, but you still have all of your availalbe credit, and not get charged interest.

4. Keep old accounts open. If you have an old card that you're not using, while it's not hurting your score, it's not helping it either. Use it lightly (like $10-20 a month), so that you can show activity. Also, it's not always a good idea to close accounts, especially if it's one that you've had the longest. Doing that shortens the average age of account you have which can make it look like you're establishing credit more recently than you have. Credit is designed to be used over time, 15% of your score depends on how long you've been building credit.

5. Another thing is not to apply for a lot of credit that's not necessary because each time that you apply whether you're approved or not, a "hard inquiry" is created that lowers your score. The only time that it's allowed is when you're making a "big ticket" purchase like a car or a mortgage loan. The credit cards you have if paid on time and the balances managed, should be enough with consistent line increases. Having a bunch of lower limit cards doesn't score as high than one high limit card that's been opened for years and years.


Hopefully my answer will have given you more insight.


Good luck!

Answer 2

Find someone who you know well (family or good friend) who has excellent credit and is willing to add you to a couple of their accounts. This can make your credit jump significantly.

There are actually "companies" on the internet that offer this service to people who want to significantly increase their FICO scores. They advertise for people who have good credit and want to make some money on the side. They then charge several hundred dollars from the person with bad credit to add them to the good credit person's accounts. They skim a couple hundred off the top and give the rest to the good credit person.

They also never give the bad credit person any of the information on the accounts to which they have been added. Although, I would imagine it wouldn't be impossible to find out that info through your own credit reports.

That's why I recommend you do this with someone you know well, so you know there isn't any chance of fraud in either direction.

Answer 3

You need at least 3 active trade lines (credit cards, auto or personal loans, etc.) in good standing to make sure that your credit has a solid base. Try to keep ending balances on credit cards not more than 40% of credit limit. Raise the available credit if a limit is too low. You can request it online or call the company. If you are paying in time, they will meet your request.Try to avoid deliquences and collections. Normally, it takes at least 6 months to build good credit from scratch. If you have a history of derogatory records it will take longer.

Answer 4

Pay all your bills on time. You need a minimum of 2 year consistent, on time payment to improve your score.

If you are carrying balances on your credit cards, pay them off. Anything over 30% of your limit hurts your score. Best thing is to only charge what you can afford to pay in full every month. Save the interest and stay out of debt.

Answer 5

Speaking as a nationally known credit score and lending expert (book, radio shows, newspaper columns..)

Thhis question takes a book to answer. Two sites to look at, the more popular (first) one DOES have false information.

www.myfico.com
www.LearnAboutCredit.com