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Here are five simple tips that you can use to raise credit score.

1. Get a copy of your credit report

Obtaining a copy of your credit report is a good idea because if there is something on your report that is incorrect, you will raise credit score once it is removed. Make sure you contact the bureau immediately to remove any incorrect information.

Your credit report should come from the three major bureaus: Experian, Trans Union and Equifax. It’s important to know that each service will give you a different credit score.

2. Pay Your Bills On Time

Your payment history makes up 35% of your total credit score. Your recent payment history will carry much more weight than what happened five years ago.

Missing just one months payment on anything can knock 50 to 100 points off of your credit score.

Paying your bills on time is a single best way to start rebuilding your credit rating and raise credit score for you.

3. Pay Down Your Debt

Your credit card issuer reports your outstanding balance once a month to the credit bureaus. It doesn’t matter whether you pay off that balance a few days later or whether you carry it from month to month.

Most people don’t realize that credit bureaus don’t distinguish between those who carry a balance on their cards and those who don’t. So by charging less you can raise credit score even if you pay off your credit cards every month.

Lenders also like to see a lot of of room between the amount of debt on your credit cards and your total credit limits. So the more debt you pay off, the wider that gap and the better your credit score.

4. Don’t Close Old Accounts

In the past people were told to close old accounts they weren’t using. But with today’s current scoring methods that could actually hurt your credit score.

Closing old or paid off credit accounts lowers the total credit available to you and makes any balances you have appear larger in credit score calculations. Closing your oldest accounts can actually shorten the length of your credit history and to a lender it makes you less credit worthy.

If you are trying to minimize identity theft and it’s worth the peace of mind for you to close your old or paid off accounts, the good news is it will only lower you score a minimal amount. But just by keeping those old accounts open you can raise credit score for you.

5. Stay Out Of Bankruptcy

Bankruptcy is the single worst thing that will destroy your credit score. Bankruptcy will lower your credit score by 200 points or more and is very difficult to come back from.

Once your credit score falls below 620, any loan you get will be far more expensive. A bankruptcy on your credit record is reported for up to 10 years.

The reality of a bankruptcy is it will limit you to high-interest lenders that will squeeze out high interest rate payments from you for years.

It is better to get credit counseling to help you with your bills and avoid bankruptcy at all costs. By getting credit counseling instead of declaring bankruptcy you can raise credit score over a much shorter period of time.

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There are advertisements both online and off selling books and systems to help you fix your credit problems. It is not uncommon for many of them to make outrageous claims.

The question naturally arises, “Are these sort of claims too good to be true?”

These credit repair companies would love for you to believe that the only requirement for fixing bad credit is time. The reality is quite different. The truth is that time is only one factor but it is not the only factor.

There is a consumer protection law known as the Fair Credit Reporting Act (FCRA). The only negative information which can remain on your credit report is what is not accurate. This means that any negative item on your credit report can stay there if it is true and can be proved to be true. This item presents us with good and bad news.

This is the good news. Through the FCRA you can improve your credit score dramatically. This can be accomplished in a short period of time. This requires a small amount of effort from you.

Now here is the bad news. While the work may take you a small amount of time, it is essential that you have the proper method on how to proceed. This is the crucial point: Most of the courses available on restoring your credit (9 out of 10) will not be helpful at all. The reason for this is that these companies will provide you with boiler plate dispute letters.

These boiler plate dispute letters are nothing more than form letters. The truth of the matter is that credit bureaus and creditors will tend not to take these very seriously.

It is quite true that anything a credit repair clinic can do for you, you can do it yourself for little or no cost. However, and this is the key point, to be successful it is imperative that you acquire the most recent insider techniques and procedures to achieve the desired results; i.e., improved credit scores.

This includes, but is not limited to, such strategies as proof of contract, constructive notice, challenge of procedure and restrictive endorsement.

This may appear complicated, but in reality they are very simple. These are just a means of communicating. In turn, this is how you exercise your consumer rights. Knowing how to proceed will enable you to get the results that you want and will raise your credit score.

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There are two major ways to fix bad credit score. The “hard” way requires time, patience, effort and careful financial planning. The SMART way requires better knowledge of the credit system and its loopholes. Here is a 4 step guide that will help you raise your score in no time:

1 Don’t play the credit game blindfolded.

Most credit consolidating places will charge you an arm and a leg for thing you can do yourself if you have the right information. Do you know how is the credit score calculated? Do you know what are the most detrimental items on your credit report? Why does paying off old collections can bring your score down? What is the perfect debt to balance ratio on your credit cards? Is installment credit(auto loans, house loans, student loans) or revolving credit (major credit cards, department store cards) more important for your final FICO score? How can piggybacking someone else’s credit increase you score? Why do “deleted” negative items from your report are far more beneficial that “paid off” negative items? The more you know about the credit system, the easier it would be to choose the right course of action.

2 The most important rule in the credit world

The credit world revolves around one magic phrase “ON TIME”. Creditors expect you to pay off your loan in accordance with the terms and conditions of the contract. You are required to pay one fixed monthly payment (installment credit) and one minimum payment calculated from your current card balance (revolving credit). When you stop paying “as agreed”, you are violating the contract. By far payment history is the single most important factor in your FICO formula. If you do have late car, mortgage or credit card payments, take care of them first. This should bring an immediate increase in your credit score.

3 The collection agency paradox.

Old collection are a tricky area when it comes to your FICO score. Paying off an old collection will not increase your credit score. On the contrary, it might bring it down. Paying off the collection simply upgrades the account to “paid’ status. It is still a negative item on your report, albeit paid. Only now it has bigger influence on your score, because the last activity on the account is more recent.

4 The time factor.

In general the older an item on your credit report, the less effect it has on the overall FICO score. And vice versa-most recent payment history has the biggest impact on your score. Focusing on what’s current will bring the most drastic changes to your credit score. Paying off old accounts might have the negative effect described in the example above.

Educate yourself on the mechanics of the credit system if you want to fix bad credit report. There are many secrets that can boost your score fast, but you have to start thinking outside the box first.

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