Tips to Improve Credit
Only Credit Agency knows for sure what will improve my credit score under the particular model used to evaluate my credit application.
That said, scoring models generally evaluate the following types of information in credit report:
I pay my bills on time. ... Payment history typically is a significant factor. My score will be affected negatively if I have been late, had account referred to collections, or declared bankruptcy.
How much is my debt? ... To improve my credit score, I try to keep the amount borrowed under 35% of credit limit. Anything higher is likely to have a negative effect on my score.
Length of credit history? ... Having only few credit lines shorter than 6 months may have an effect on credit score or negatively influence lender decision.
Have I applied for new credit recently? ... Applying for many new credit lines will negatively affect score. Too many means 2 or more a week. Each can shave up to 6 points from overall credit score. Inquiries by creditors monitoring my account or looking at credit reports to make "prescreened" credit offers do not count.
How many and what types of credit accounts do I have? ... Too many have negative effect. To improve my credit score I keep 5 including mortgage, car loans, credit cards, etc. No loans from finance companies as they may negatively affect score.
Scoring models may also take into consideration job or occupation, length of employment, or whether I own a home.
To improve my credit score under most models, I concentrate on paying bills on time, paying down outstanding balances, and not taking on new debt. It's likely to take some time to improve score significantly.
