How to improve your credit report and score

Instead of simply throwing money into buying your credit scores or paying
for some ongoing monitoring service that you may not pay attention to
anyway, take an interest in improving your credit standing and score.
Working to boost your credit rating is especially worthwhile if you know that
your credit report contains detrimental information.

Here are the most important actions that you can take to boost your attractiveness
to lenders:

Get all three of your credit reports, and be sure each is accurate.
Correct errors (as I will explain in my next post) and be especially sure to
get accounts removed if they aren’t yours and they show late payments
or are in collection.

If your report includes late or missed payments more than seven
years old, ask to have those removed. Ditto for a bankruptcy more than
ten years ago.

Pay all your bills on time. To ensure on-time payments, sign up for
automatic bill payment, which most companies (like phone and utility
providers) enable you to use.

Be loyal if it doesn’t cost you. The older the age of loan accounts you
have open, the better for your credit rating. Closing old accounts and
opening a bunch of new ones generally lowers your credit score.

But don’t be loyal if it costs you! For example, if you can refinance your
mortgage and save some good money, by all means do so. The same logic
applies if you’re carrying credit card debt at a high interest rate and want
to transfer that balance to a lower rate card. If your current credit card
provider refuses to match a lower rate you find elsewhere, move your
balance and save yourself some money.

Limit your debt and debt accounts. The more loans, especially consumer
loans, that you hold and the higher the balances, the lower your
credit score will be.

Work to pay down consumer revolving debt (such as on credit cards).