How do I improve my credit score?

The best way to improve your credit score will depend on your individual situation.  But here are some great tips:

1.  Whatever you do, the most important thing is to make sure you don’t get any collections.  Setup automatic payments for utilities if you can, and make sure your checking balance will continually cover your recurring bills.  Anytime you go to the doctor or get a ticket, pay it right away.  Overdue library books?  Return them.  All of these are common collections that we see on credit reports.

2.  Make your payments on time.  A late payment can drop your score by a couple dozen points.  For your loans and credit card payments, setup automatic payments if you can and keep track of your checking balance.

3.  Keep your credit card balances to a minimum.  If possible, keep it under 15%, then 30%, then 50%.  These are breaking points for scoring, and the lower the balance the better you are off.  Pay them off monthly to avoid interest.

4.  Open up more debt if you need to.  If you don’t have three active accounts (tradelines), then you probably don’t have enough debt.  In order to improve your credit score you need to show that you reliably pay off your debt.  Don’t have any debt?  Get some.  And then pay it.