Improving your FICO® credit score may take time and often there is no quick fix. FICO scores reflect credit payment patterns over time with more of an emphasis on recently reported information than older information. Below are some general tips to follow that may increase your FICO credit score:
- Focus on the negative factors provided with your FICO score. These represent the main areas where your score could be higher.
- Don't open new accounts for the purpose of providing a better credit picture – it probably won't raise your FICO score and, in some instances, may even lower your score. Apply for and open new credit accounts only as needed.
- Keep balances low on credit cards and other “revolving credit”. High outstanding credit card debt can negatively impact your FICO score.
- Pay off debt rather than move it around from one credit card to another. The most effective way to increase your FICO score in this area is by paying down your total revolving (credit card) debt.
- Pay your bills on time. Delinquent payments, even if only a few days late, and collections can have a major negative impact on your FICO score.
- If you have missed payments, get current and stay current. The longer you pay your bills on time after being late, the more your FICO score should increase. Older credit problems count for less, so poor credit performance won't haunt you forever. The impact of past credit problems on your FICO score fades as time passes and as recent good payment patterns show up on your credit report. And good FICO scores weigh any credit problems against the positive information that says you're managing your credit well.
- If you have had problems in the past, re-establish your credit history by opening new accounts responsibly and paying them on time.
- Manage credit cards responsibly by keeping balances well under the credit limit. In general, having credit cards and installment loans (and making timely payments) will raise your FICO score. People with no credit cards, for example, tend to be higher risk than people who have managed credit cards responsibly.
- Do your rate shopping for a loan within a focused period of time. FICO scores distinguish between a search for a mortgage or auto loan, where it is customary to shop for the best rate, and a search for many new credit cards.
- Don't close unused credit cards as a short-term strategy to raise your FICO score. This approach could backfire and actually lower your FICO score.
- If you have been using credit for only a short time, don't open a lot of new accounts too quickly, as rapid account build-up can look risky to a lender.
- If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. This will not improve your FICO score immediately, but if you can begin to manage your credit and pay on time, your score should increase over time. And seeking assistance from a credit counseling service will not hurt your FICO score.