Pay your bills on time
This may seem like a no-brainer, but just one late payment could negatively affect your credit score for years. However, if you regularly pay your bills on time, your score will improve dramatically. For example, someone with an average credit rating of 707 can raise their score by as much as 20 points by paying all their bills on time for one month.
Eliminate late payments
If you do make a late payment, try contacting the creditor to ask for a good faith adjustment that will eliminate the late payment on your credit report. Be patient and understanding when calling, though. It may take more than one phone call, and if you’re rude, you’ll probably be denied.
Keep balances low
The closer your balance is to zero, the more favorable you’ll be scored. Keeping your credit use less than 30% of your credit limit is the best way to achieve a good score. Maxing out your credit cards could lower your average score by as much as 70 points.
Don’t cancel your cards
Canceling an account won’t make it go away; a closed account still shows up on your records. In fact, unless the account was opened less than two years ago and you have over six credit cards, closing an account can hurt your score. Credit scoring software assumes people with longstanding credit are less of a risk to default on payments.
Remember to check your credit score before asking for a loan. There are ways to improve your score, but the best way to increase those three little digits is to pay back on time and in full.