You improve your credit score by cleaning up your credit report. Below are the tried-and-true ways to clean up your credit report. This is truly everything you need to know. Don't pay for credit repair services, because they can't do anything for you beyond what's listed here. Late payments & collections Don't make any (more) late payments. Make sure you pay every bill on time from here on out. Taking steps to bring your score up does you no good if you do things that send it right back down. Also, the older a late payment is on your credit report, the less it hurts you. So a late payment you made last month hurts a lot right now, but in two years that same late payment won't hurt your score as much. If you make no more late payments, your score could improve 50 points within a year.
Pay off collections. If you have a delinquent account, pay it. That won't remove it from your credit report, but it will still help your score, because a late payment is not nearly as bad as an unpaid debt.
Correct errors. If there are any errors on your report (such as late payments when you weren't late), write a letter to the Credit Reporting Agency, CRA in question and ask that the error(s) be removed. The CRA has 30 days to investigate; they'll write to the creditor and ask them to verify the payment info. If they don't, the CRA will remove the negative info from your file.
Make sure negative info older than 7 years isn't reported. By law, negative information in your credit report must be deleted after seven years (10 years for bankruptcy). If your report contains negative info that's more than seven years old, write the CRA and ask them to remove it. Also note that if you missed a payment 8 years ago, but it took the creditor 2 years to report it to a collection agency, it will likely show up on your report as a 6-year-old debt. In that case, write to the CRA and explain that the debt is really 8 years old and should be removed. Include a copy of any paperwork that supports your claim.
Add your side of the story. If there is negative info in your report (such as non-payment of a debt), but you have a good reason for not paying the debt (merchandise not received, legitimate dispute with the merchant who would not negotiate in good faith, etc.), write to the CRA and ask them to add your short explanation about the matter to your file. If the lender pulls your credit report they might see the statement you added. They might not see it, because some lenders just look at the credit score and don't scrutinize the report itself too closely, but it couldn't hurt.
Paying down debt Pay down loans. The more debt you're carrying, the lower your score. Your debt is evaluated in comparison to the total credit available to you. So $1000 of total debt with a $1500 total credit limit (1000/1500 = 67%) is probably worse than $3000 of debt with a $10,000 limit (3000/10,000 = 30%). So pay down your debt to increase your score.
Once I made a single $11,340 purchase on a card with a $12,000 credit limit. Even though my total credit available was about $188,000 on all my cards and I had only a few thousand dollars outstanding on my other cards, that one purchase near my credit limit on that card plunged my scored nearly 70 points from 825 to 757 in a single month. However, once I paid off that charge, my score zoomed right back up by 68 points the very next month.
The power of time Wait. Credit scores get better with time, just like wine. The older a late payment is, the less it hurts you, and the older a credit card account is, the more it helps you. If nothing else changes, your credit score will gradually creep up on its own.
Getting credit if you don't have any Get and use a credit card. In most cases you need to have (and use) at least one credit card in order to have a good credit score. If you don't have one, get one. Just use it to buy your groceries, and pay it off in full every month.
Ignore everything else
Ignore most other advice you hear. Myths about what actually helps or hurts your credit score would fill a book. Some of them are listed in the sidebar above. Some of them are even espoused by people whom you'd think would know better, like mortgage brokers. But the list you're reading now is all you need to focus on. Be skeptical of any other advice you may hear about how to improve your score. If it sounds legitimate and you want to believe it then try to verify it first somehow, don't just accept it on faith. Because taking bad advice might not just fail to improve your score, it could actually hurt it. Really, just correct errors, get old negative items off your report, maintain a good payment history, and don't max out your credit, and that's pretty much all you need to do.
Don't pay for credit-rebuilding services. The tips in this section are everything you need to know about rebuilding your credit. There isn't anything else. Nobody can do anything more for you than what I've listed above. Don't throw your money away on credit repair services.
Secrets Lenders Don’t Want You to Know!
Understanding Finance Options: (FHA, VA, Seller or Conventional Financing.)