8 DIY Strategies to Boost Your Credit Score

by Shawanda Greene


  1. Request a free copy of your credit report at AnnualCreditReport.com. Under the Fair Credit Reporting Act (FCRA), you have a right to receive a free copy of your credit report once a year from each of the three major credit reporting bureaus: Equifax, Experian, and TransUnion.  AnnualCreditReport.com doesn’t provide a FICO score with your free credit report.  However, you can obtain your FICO score and credit report at myFICO.com. Unless you’re in the market for a loan, you probably don’t need to know your FICO score.  So, I suggest you save your money until you do.


  3. Dispute inaccuracies on your credit report in writing. If you received a copy of your credit report electronically, then dispute errors online directly with the bureau that’s recording the erroneous information.  If not, use the form provided with the hard copy of your credit report or use the sample dispute letter on the Federal Trade Commission’s website as a guide for drafting your own.  Some common credit reporting errors are as follows: 
    • Accounts that don’t belong to you
    • Delinquencies that are misreported such as late payments or charge-offs
    • Bankruptcies that are more than ten years old
    • Unpaid judgments that exceed the greater of seven years or your state’s statute of limitations
    • Paid judgments or tax liens that are more that seven years old
    • Hard credit inquiries, i.e., applications for credit, you either didn’t authorize or that are more than two years old
    • Paid liens or judgments that are listed as unpaid
    • Duplicate collections whereby an original creditor and a collection agency report the same account in collections

  5. Pay your bills on time. In an effort to stick it to your lender for charging you a late fee, you might consider skipping a payment altogether.  Don’t do that.  Not only will you have to pay interest on the late fee and the remaining unpaid balance, but FICO doles out a far greater punishment to borrowers who pay their bills at least 30 days late.  According to Liz Pulliam Weston, author of Your Credit Score, Your Money & What’s at Stake, a single late payment could cause your FICO score to drop 100 points. If forgetfulness causes you to pay your bills late, have the minimum payment automatically paid from your checking account or charged to a credit card.  Don’t try this if you’re prone to overdrawing your account or exceeding your credit limit.  Remember to pay off the remaining balance on revolving accounts by setting up an e-mail or text alert through Google Calendar or Mint.


  7. Keep balances on your revolving credit accounts low. Use less than 10% of your credit limit.  Some people say 30%, but let’s err on the conservative side.  My credit score dropped eight points when Bank of America cut my credit limit in half.  During the time, I was definitely using less than 30% of my total credit. 
    The FICO formula doesn’t care that you pay off your balance in full every month.  Your credit report usually reflects the outstanding balance on your last statement.  If you’re in the market for a loan, payoff your revolving credit accounts completely, and don’t incur any new charges until after you’re approved for a loan.  If that makes you nervous, then continue as you were but make sure your payments are posted to your account before the statement closing date.


  9. Don’t close revolving credit accounts. Contrary to popular belief, having a lot of available credit does not negatively effect your FICO score.  Actually, those open lines of credit may be helping your score.  A few months ago I received a letter from Citibank stating that they were going to shut down one of my credit cards due to inactivity.  I hadn’t used the card in years.  If I new then what I know now, I wouldn’t have called Citi and closed the account.  Although the $1,300 limit was a small portion of my total available credit, this was my second oldest account.  Generally, a longer credit history positively impacts your score.  The FICO formula considers the age of your oldest account, the age of your newest account, and the average age of all your accounts.  Closing my second oldest account makes my credit history look much shorter than it is.  As a result, my FICO score took a hit.  Don’t make the same mistake I did.


  11. Use CreditKarma to monitor your credit.  It’s the only reputable company I know that will provide you with a truly free credit score.  Although CreditKarma doesn’t provide a FICO score, it does give you an indication of what’s happening inside your TransUnion credit report.  A steep decline in your score could signal to you that something funky was reported to the credit bureau.


  13. Shop for credit within a 14 day period. Applications for credit, i.e., hard inquiries can have a negative effect on your FICO score. Fortunately, your FICO score takes into consideration the reality that people search for the best interest rates. WARNING: This only applies to rate shopping for auto, student, and mortgage loans. FICO is less forgiving when it comes to revolving lines of credit.


  15. Refinance cosigned debt. In the event you made the unwise decision to cosign a loan for someone who clearly wasn’t a worthy credit risk for the lender, see if you can prod the primary borrower to pay off the loan you have together with a loan for which you’re not responsible. For instance, if your former spouse was awarded the family vehicle in the divorce settlement, the loan will still show up on your credit report and affect your credit score if your name is on the loan. This might be a stretch, but your ex may be willing to release you from the obligation by refinancing the loan in they’re name only. Unless they really hate your guts, there’s probably no harm in asking.

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{ 2 comments… read them below or add one }

Wonga October 4, 2011 at 8:24 AM

In fact using credit wisely means not over-using credit. While it may appear tempting to accept every 0% credit card offer you get in the mail, excessive open trade lines will lead to lower credit scores and turn downs from mortgage lenders.


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