You do several steps to raise your credit score. It will take you time and patience along with being committed to living in a fiscally sound and responsible way. Everything you have done financially for the last seven years will be on your report, and bankruptcy stays on the report for 10 years. Changing this information is done one step at a time.

Your Credit Score

Fair Isaac Company (FICO) is the process used to reduce all your credit information to a three-digit number. The score determines how much interest you pay and whether or not you can buy a car or get a loan; it can even affect your employment. If you have a low FICO score, it will cost you more in high interest rates from mortgages to credit cards. The rating score is 750 excellent, 720 good, 660 to 720 acceptable, 620 to 660 uncertain and under 620 risky. The process is calculated by 35 percent of your payment history, 30 percent on the amount you currently owe, 15 percent on your credit history, 10 percent on how much new credit you have and 10 percent on what type of credit accounts you have.

Raising Your Score

Request a copy of your credit report from the major credit bureaus: Experian, TransUnion and Equifax. You get one free copy from each company per year. The three companies maintain a site called AnnualCreditReport where the report can be obtained. Look through this report to ensure there have not been any errors. Should you find errors, immediately dispute them. Clearing up any inaccuracies can raise your score immediately. Pay off any debts that are yours, as it helps to clear the amount of debt delinquency. Raise your scores through paying your bills on time. Make sure you are handling your credit responsibly. If you have a mortgage, pay that on time. That one major payment can help you raise your rating. If you have installment loans, paying those on time is even more important than paying credit cards on time. Stay below your credit limits. Your FICO will lower if you have maxed out your credit cards. Do not use more than three credit cards. Having too many cards lowers your rating. Home ownership raises your score, especially if you are paying on time. If your mortgage payment is due on the 23rd, but you do not pay until the 25th, that will show as a late payment and lower your score. Paying on time will show in a few months and raise your score. Moving constantly can lower your score. Show yourself to be fiscally responsible by using credit cards and paying the balances each month. Be patient and vigilant with your payment responsibilities, as you will reap the rewards of building positive credit and raising your score.

Source:

Bills

USA Today

Consumer Reports

Resource:

Money

The Smarter Wallet

Smart Money Daily