What to Do

Order your credit report and search for errors. You can get free reports from annualcreditreport.com. Dispute mistakes! Please keep in mind there are an alarming amounts of mistakes on Credit Reports because of the amount of credit people have and have applied for.
Pay your bills on time. Your payment track record accounts for about 40% of your FICO score.
Be patient. Negative information like late payments will generally drop off your credit report between five to seven years
Maintain a healthy mix of credit. A blend of revolving; such as credit cards and installment loans can help boost your score. This is even more important over the past few years with some of the new regulations: such as
Apply for your own credit cards. Have 3 open lines of active credit at all times.

What Not to Do

Don’t max out your available credit. Keep credit-card balances low relative to your credit limit. This is even more important under newer regulations (again – which ones?). My personal suggestion is to never have a 30% credit balance or more borrowed on a credit limit. Example: $10,000- limit on a credit card, never go above a $3000- balance on that credit card, etc.
Don’t dawdle when shopping for the best rate on a loan. Confine loan shopping to a few weeks so that credit inquiries won’t weigh on your score. Please do not have 10 Banks pull your credit in 10 days.
Don’t open up a bunch of credit-card accounts you don’t need, thinking the higher lever of available credit will boost your score. Your FICO score will generally drop a few points with each new account.
Don’t close old credit-card accounts in an attempt to improve your score. You’ll lower your total available credit, which could damage your score.

Ask me how to increase your score in 90 to 120 days?

Take out two new lines of credit (Yes, believe it or not I said take out two new credit cards) and use one for gas and one for groceries. I would suggest getting major Credit Cards (Visa, Mastercard, Amex, etc.) Use them, pay it off, use them, pay it off, use them, pay it off, etc. Never adding any additional monthly debt, paying all of the charges off every single month. This method will add 20 to 40 points to your Credit Scores in months.

Sources: Fair Isaac, WSJ Research

bc@SmarterBorrowing.com 617.771.5021