To really start working on your credit score, you should first try to understand how your credit score works.  The most popular credit score out there is the FICO score and you really should understand the FICO score calculation.  If you know this then you will begin to see how you stack up and should be able to come up with your own solutions, depending on your situation, to raise your credit score.

The first thing you should know about raising your credit score is that you must pay your accounts on time.  You should never be late.  This is the largest part of your score and even one late payment will hurt your ability to get an excellent credit score.

Paying on time is first but second is the level of debt you carry.  This is commonly called your debt to credit ratio and having a good debt to credit ratio is key to having a good score.  If you commit to paying off your debt you will see an improvement over time.  It will be gradual and will take time.  This also requires true commitment.

The next part to consider when trying to figure out how to raise your credit score is to look at your credit history.  What you need to know that the average age of all your accounts is called into question as well as the age of your oldest account.  There isn’t much you can do to manage this piece but maybe not apply for credit and get new accounts if you don’t need credit.

Another thing to consider if you are trying to figure out how to raise your credit score is your applications for credit, meaning are you applying for new lines of credit?  You should stick to the rule if you don’t need the credit don’t apply for it.  I know all those you get in the mail are great or a 10% discount off the current purchase at the local retailer is tempting, but skip it.  The applying for excessive lines of credit can hurt your chance to improve your score.

There are lots of other ways to start improving your score and these are only a few.  But the ones above are a good starting point.

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Over the last year and half I have seen my credit score go from a credit score below 620 to what might be considered an excellent credit score of 730.  Even though this might be on the low end of what is considered an excellent credit score I am going to consider it a huge accomplishment.

Over this time, I have had no late payments, which has also helped my cause.  But my improvement in credit score can directly be related to my focus on paying down my debt.  But I still have a little more to go.

Here is what I have found about your debt to credit ratio.  First, if it is high, it is almost impossible to have a good/excellent credit score.  This is the second largest part of your credit score and it carries a weight in your score of 30%.  Second, lowing your debt to credit ratio is maybe the hardest thing you can do.  You have to commit to paying off every bit of debt.  And if you are like most Americans, you are carry a mountain of debt that seems like will never be paid off.  Third, your debt to credit to credit ratio is not only based on your total debt and total available credit but also on an account by account basis.  This is something definitely overlooked, but could be a reason why balance transfer could hurt your credit score.

So what is a good debt to credit ratio?

I personally am not going to sleep till I have no debt.  But most knowledge on the internet will point to a level anywhere between 20-30% of your available credit.  This is across all your accounts and also on an account by account basis.  If you are there great, but if not getting there again will take to tough things: Time and Discipline.

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Closing Accounts to bump up your score

The truth is this really has a negative effect. First, the idea of closing an account won’t make the account go away. Actually it will stay on your credit report for the next seven years. Also, the second largest part of the FICO score formula is your credit utilization. Or the percentage of debt you have to the available credit you can borrow. Closing an account raises your utilization and therefore could hurt your score.

There are reasons to close an account such as a true lack of control. If you know if the account is open you will spend like crazy then it might be a good idea to close the account.

Checking your own score could hurt it

Checking your own score is not going to hurt your FICO score. Actually checking your score is a sign of an informed consumer and one who wants improve and stay on top of their score. The only time have your score check will possibly count against you is when you are applying for new lines of credit. And actually even then it might not be seen as a negative event. It is when you start applying for several loans in a short period of time you will start to see the effect of too many credit inquiries.

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