The Best Way to Improve Your Credit Score

1. Start by ordering your credit reports from all three major credit bureaus and reviewing each one for accuracy. 
   • You can get reports from a service like MyFico.com, or order from each bureau separately online or by phone:
   1. Equifax: www.equifax.com, 800-685-1111
   2. Experian: www.experian.com, 888-397-3742
   3. Trans Union: www.transunion.com, 800-888-4213
      • Check to make sure your identifying information is accurate.  Any errors or inaccuracies may mean that somebody else’s information is in your file.
      • Review your credit accounts.  Make sure all the accounts belong to you.  If there’s any incorrect information, you may be a victim of identity theft.  It’s also possible that the credit bureau may have simply mixed your information up with somebody with a similar name.
      • Check to see who’s made inquiries about your credit.  If there are any inquiries older than two years, or credit application inquiries that you didn’t authorize, dispute them.
      • Check to make sure that all records regarding bankruptcies, lawsuits, foreclosures, and tax liens are accurate.  If there are any errors, dispute them.
2. Always pay your bills promptly.  Any late payment can lower your score, but the good news is that most creditors wait at least 30 days before reporting it to a credit bureau. 
   • If you want to make sure you’re never late paying bills, there are a number of methods to help you out:
   1. Automatic payment allows a company to take money from your checking account.
      
   2. Recurring credit charges automatically charges your bill to your credit card.
      
   3. Online bill payment allows you to pay your bills automatically through your bank’s website.
3. Pay down your debt.  The lower your debt compared to your credit limit, the better your score: 
   
1. Prioritize your debts by how close the balances are to the accounts’ credit limits.
   
2. Avoid consolidating your debts.  It’s better to have small balances on a number of cards than a large balance on one.
   
3. In order to raise money to pay down your debt, you can hold a yard sale, trim your spending, and/or take a second job.  Do whatever it takes to put a significant dent in your debt.
4. Keep credit cards and other revolving accounts open.  Closing them just limits your available credit, which can hurt your score. 
5. Don’t apply for new credit unless absolutely necessary.  Once you’ve established a solid credit history, applying for new credit can only hurt your score.
6. In order to establish credit, it’s a good idea to have checking and savings accounts.  They show lenders that you’re financially responsible.  They’re also a way for minors to begin establishing a financial history, in preparation for a credit application.
7. Another way for minors to establish a financial history is by being added to someone else’s credit account (as long as that person is responsible). 
8. One more way to establish a credit history is to have a responsible person co-sign a loan.
9. A new method for gauging creditworthiness for people without credit histories that’s been gaining popularity with lenders is to check nontraditional sources such as landlords, utility companies, payday lenders, check monitoring companies, and retail purchase payment plans.

Disclaimer: This article is provided for information use only.  It does not take the place of an attorney, a tax advisor, or an accountant.  Always seek out the advice of a licensed professional before undertaking any significant change in your financial situation.