How to Improve Your Credit Score Quickly

Many citizens of the United States are finding it harder to obtain credit. We have heard a lot more about credit scores in the recent years than we have our overall credit report. So how can one improve their credit score without taking out a new credit line?

Don't Apply

Stop applying for new credit when you find yourself frustrated with a dozen denials. Each credit report inquiry lowers your credit score. If you have a large amount of inquiries in a smaller time frame your score could fall dramatically low and very fast.

Utilities

Utility companies are started to report to the credit bureaus on a monthly basis. Gone are the days when you had to be three months behind on the electric and cable to find the account on your credit report. Utility companies are started to report your accounts much like a credit card, although without a credit limit. Your payment history will appear for the previous two years and any late payments could result in your credit score plummeting.

Increase Your Limits

Inquire with your credit card companies about increasing your credit limit. Do not take this as an excuse to start spending. When your company agrees to increase your limit it will have an immediate, positive effect on your credit score. This action will immediately make your credit used to credit available ratio look better.

There is a happy medium with credit used to credit available ratios, so obtaining 30 high dollar increases may have the opposite effects. Keep your increases minimal (1 or 3 cards) and favorable ($100-$400 increase in limit) without killing your debt to income ratio in the meantime. Most credit card companies will allow you to request an increase every six months.

Be an Early Bird

If you have the ability to pay your credit card bill early you should do so. Obviously you do not want to be late, but there is a better reason. Making that payment prior to the next statement date will lower the amount that will be reported to the credit bureaus for that month. Most likely this will be a lower amount than last months reported balance and your credit score will rise.

To clarify: If you owe $150 on a credit card and the next statement date is March 1. Make your payment by the 25^th of February. Let's say the payment you make is $50. Paying this by the 25^th will result in your reported balance being $100, paying it by the 1^st will result in your credit report showing a balance of $150. (We are not accounting for any finance charges, prior late fees, over the limit fees, or any other form of charge that may make the amount appear different on your credit report. This is done on purpose in an effort to make the numbers better understandable.)

Not only does this lower your debt to income ratio, your credit available to credit used ration, it also makes your payment history better. You may even alleviate some hefty finance charges depending on the company's terms and conditions and various fees.

Old Cards

Use that old credit card from time to time. You do not want to let a credit card company close your account for non-use. If this happens your credit available to credit used ratio will become tighter and your credit score may fall. Spend a small amount on the card three to four months before its expiration date. If possible, pay it off immediately and continue to do the same thing until the expiration.

Most credit card companies will not cancel any account that has some time of balance or recent history of use. Remember to make the purchase a small one, though. You do not want to hurt your credit available to credit used ratio. Fill up the gas tank if you cannot think of any other way to keep the card active.

(These are just a few ways I personally was able to increase my credit score. Increasing your credit score isn't as hard as it may seem once you know where to start.)

sources:

http://money.aol.com/