Some of the best advice on how to improve your credit score comes from the organization that regulates it. That organization, FICO (Fair Isaac Corporation) instituted the internationally accepted standard for computing credit scores in the mid 1980’s. Your credit score is tabulated by factoring in a variety of information from your credit history. A high credit score designates you as a low risk to lenders, a low score as a higher risk. The highest FICO score one can receive is 850, the lowest 300. There is not much you can do to raise your score if it is already over 700, but those below can take advantage of FICO’s advice on how to improve your credit score.

How to Improve Your Credit Score – Mistake #1 – Failing to Check Credit Score

The most common mistake that those with low credit scores make is failing to be aware of their credit score. Many people aren’t aware of the damage that overdue accounts and unpaid bills have on their credit rating. Often there are errors on some accounts that contribute to credit scores that would otherwise be higher. Obtaining a copy of your credit score from FICO can show you where your weaknesses lie and can help you to correct any errors or bad habits that may be contributing to a low credit score.

How to Improve Your Credit Score – Mistake #2 – Failure to Keep Track of Payments

Believe it or not, late payments can do more to damage a credit rating than you might realize. One of FICO’s most practical tips on how to improve your credit score is to set up a payment reminder system. One way to do so is to set reminders on your cell phone or computer, another is to enlist in your bank’s online direct debit service. This will automatically deduct payment for any bills you designate, though keep in mind it will only pay the minimum due. Making payments on a regular basis yourself, and for more than the minimum when possible, will show that you have a sense of money management which will eventually reflect in your credit score.

How to Improve Your Credit Score – Mistake #3 – Failing to Lower Total Debt

Many consumers think that by simply paying the minimum amount due on their credit cards on a regular basis they are lowering their debt. The opposite is actually true, as continued purchases and the interest accumulated will continue to increase the overall debt. The first step to lowering debt is to stop using credit cards completely, and then concentrate on accounts which charge the most interest. Paying as much as you can on high interest accounts while maintaining the minimum payment on lower interest accounts, will quickly eradicate debt while raising your credit score.

Additional Tips on How to Improve Your Credit Score

The above are some of the major mistakes consumers make which damage credit scores. They contribute greatly to a credit rating, but there are things we can do on a daily or monthly basis which are also effective means of how to increase your credit score. Simple things such as; keeping credit card balances low (recommended 30% of limit), keeping old accounts open, avoiding opening any new credit card accounts while you have outstanding balances on others, and paying off debts completely instead of moving them around, can help you to repair damaged credit and gradually increase your credit score.

The secret of how to improve your credit score lays in repairing your credit history. That can only be accomplished through dedication, discipline and smart financial planning. Once your history is cleaned up, make sure you maintain your hard-earned improved rating by continuing to abide by the above principals.

Ethel Wilson has been advising clients on how to improve their credit score ratings for over 12 years. With an extensive background in the banking, credit scores and financial industry, she now shares the best of her credit score information as a contributor and editor of http://www.creditscoreresource.com

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