It is easier to avoid credit problems than it is to come back from a credit mistake.

Why It Matters: The higher your credit score is, the more desirable you'll be for a loan or line of credit. Learning how to manage your FICO score is the best way to improve it.

What You Need to Know: There are five categories that make up your FICO score. These are: payment history, amounts owed, length of credit history, types of credit used, and new credit. Here are some tips on how to improve your score in each category, resulting in a better score overall.

1. Payment History Tips:
   • Make timely payments. Late or missed payments affect your score significantly and can cause major damage.
   • Even if you have missed payments, get on top of them and stay current. The longer you pay your bills on time, the better your score will be.
     

   • If you cannot manage your credit, contact your creditors or seek credit counseling. Often times you can negotiate with your creditors to reduce your rate or make other arrangements to help you make your payments. Once you get it under control, your score will improve over time

2. Amounts Owed Tips
   • Keep your credit card balances low. The higher your balances are and the longer you carry them, the worse your score will be.
     
   • Pay off your debt instead of moving it around.

   • Don't close unused credit cards or open unnecessary ones in an attempt to raise your score in a short amount of time.

3. Length of Credit History Tips
   • Build your credit slowly, beginning with just one or two accounts.
     

   • If you are just beginning to manage credit, don't open a lot of new accounts. because it lowers your average account age.

4. Types of Credit Used Tips
   • Only open accounts you need as numerous accounts can harm your score.
     

   • Manage credit cards and loans responsibly.

5. New Credit Tips
   • Shop for the best rate in a focused period of time. If several inquiries occur in a short amount of time, they are counted as a single inquiry.
     
   • Re-establish credit if you have had problems in the past. If you open new accounts and manage them wisely, you will improve your score.
     
   • Check your credit report from time to time. Requesting a report from the credit bureau directly does not affect your score.

Select a link from the list below to begin learning more about your credit.

Get a FREE Copy of Your Credit Report
It’s Never Too Late to Repair Your Credit
Inside Your Credit Report
What’s In Your FICO Score
What Is Good Credit
Establishing Good Credit
How to Improve Your FICO Score
Using Credit Cards Wisely
30 Reasons Your Credit Score Is Low
Repairing Your Own Credit
Judgment Strategies
Facts About Credit Inquiries
Your Rights Regarding Debt Collection
Divorce and Credit
Coming Back After Bankruptcy
Charge-Off Debt & the Seven Year Rule
Top Ten Do's and Don'ts During the Loan Process
Identity Theft and the FACT Act
CRC – What You Can Expect