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Tips for boosting your credit score
What you're looking for on your report are factors that could be affecting your score. Look for errors in the report, such as accounts that aren't yours, late payments that were actual. What you're looking for on your report are factors ly paid on time, debts you paid off that are shown as outstanding, or old debts that shouldn't be reported any longer (negatives are supposed to be deleted after seven years, with the exception of bankruptcies, which can stay for as long as 10 years).
After repairing errors, the fastest route to a better score is paying down balances on credit cards, says Watts and David Herpers, chief marketing officer for Atlanta-based Amerisave Mortgage Corp.
"There's really no silver bullet, but I would think that over 60 days, it's possible to increase your score 20 points by paying down your credit lines," Herpers says.
Had a few late payments in your past? If you find yourself in some financial difficulties, you can protect your score by making sure your payments don't go 60 days past due, Herpers says. "Some lenders don't report 30 days past due, but they all report 60 days past due."
Even if you've paid your bills late in the past, you can improve your credit score by paying every bill on time from now on, says John Ventura, a consumer law attorney and author of "The Credit Repair Kit." "Forget about grace periods," he says. "If you want to have a really good record with the credit agencies, pay your debt before it's and and keep your balances low."
A big no-no.
One thing you shouldn't do if you're just trying to boost your score is close unused accounts, Watts says. "If someone tells you to close unused accounts to improve your score, they're pulling your leg," he says. "It won't help you and it can hurt you."
Closing unused accounts without paying down your debt changes your utilization ratio, which is the amount of your total debt divided by your total available credit. "You appear closer to maxing out your accounts," he says. "That's why your score can drop. It doesn't mean people shouldn't close them, but don't close them to improve your score."
If you do cut up cards, though, leave the oldest one open, says Steve Rhode, former president of Myvesta.org, a national nonprofit financial crisis center.
The length of your credit history is another factor in your score. If you close the account of the credit card you got when you were a freshman in college and leave open the ones you just got within the last couple years, it makes you look like a much newer borrower.
"Keep a couple of the oldest open; I don't care what the interest rate is," he says. "Creditors don't care what the rate is."
Working with credit card balance
Another strategy for bringing up your score: Transfer balances from a card that's close to being maxed out to other cards to even out your usage, says David Chung, interim president and vice president of business development for Maryland-based CreditXpert Inc., which provides credit tools to lenders. Or just spread out your charges between a few cards.
"Try to get the usage on all of them at 20 to 30 percent instead of a bunch at zero and one at 80 percent," Chung says. "You're not spending less, you're just shifting it around to different cards."
It could work, Watts from FICO says. "Transferring the balance to a card with a lower utilization could help," he says, "but it's much better to actually pay down the debt if you have the cash kicking around."
If you're really into finessing the system, check your credit report to see what day of the month your creditors send updates on payments to the credit bureaus, Chung says. They're rarely on the same cycle as your payment due date. That's why you can pay off your card every month and your credit report will show you carrying a balance. Then, make your payments several days before the reporting date.
All of these strategies generally take at least 30 days because lenders don't report payments more than once a month .
Rapid rescoring
If you're in the throes of qualifying for a mortgage and need a score boost in a hurry, you can speed the process along with rapid rescoring. If you've got legitimate negative information on your credit report, such as late payments or accounts in collections, you're out of luck. But the process of rapid rescoring can help increase your score within a few days by correcting errors or paying off account balances.
You can't do this one yourself; you'll need a lender who is a customer of a rapid rescoring service. Generally, the service will run roughly $50 for every account on your credit report that needs to be addressed, but it could save you thousands on your loan.
If a consumer can find a lender who is a customer of a rapid rescoring service, new information can be posted within 72 hours, Watts says.
Some nifty online tools are available to find out which strategies could have the most impact on your score. Fair Isaac's www.myfico.com site offers a credit score simulator when you purchase a credit score. It will show you how paying down your account balances -- or not paying any of your bills on time this month -- would affect your score.
CreditXpert's "What-If" simulator lets you play with several variables, such as buying a car, paying off a student loan and opening a department store account, all at the same time. They don't sell the simulator directly to consumers, though. You can get a list of places that do sell it on the consumer page of its .
The bottom line, the experts say, is that you're not powerless when it comes to your credit score.
"There are a lot of things you can do to improve your score," Chung says. "You need to understand what your credit is like now and what's influencing your score today. Then you can take an objective look at the different options available."
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