Raising your credit score, also called a FICO score, can be easy. My FICO scores were 555, 567, and 594 meaning most of the time I was turned down for new credit and when I did receive it the interest rates were astronomical. I was able to increase each of my scores over 100 points in a little under six months. Those results are amazing, even to me, but if you understand what drives your scores up or down you can do the same for your own scores.
The first step in my journey to raise my credit scores was to learn all I could about how my credit files created my scores. I learned the score lender's use most, your FICO score, is created by a complex formula owned by the Fair Isaac Corporation. The formula takes the information in your credit file and calculates your FICO score based on that information. To learn more about FICO scores you should visit myfico.com.
So once I knew what was keeping my scores low, in my case high credit card balances and old derogatory information, I decided to find out how to fix the situation.
The first fix was easy. I needed to pay down my credit card balances. My total available revolving credit was $4,000 and my total revolving balances were over $3,500. In the eyes of the FICO formula this made me a terrible risk for lenders and my score was lowered accordingly. I used money I had in a savings account to pay off my balances and the results were slow but impressive. In 60 days, once my account balances updated on my credit reports, my FICO scores increased 45-60 points!
I found some derogatory information in my credit files that was having a negative impact on my scores also. These were accounts showing late payments of 30, 60, and even 90 days. Fortunately for me these accounts were 11 years old. According to the Fair Credit Reporting Act negative information can only be reported for 7 years. I disputed these accounts as "obsolete" with the credit bureaus and they were removed promptly. My scores shot up to 632, 696, and 706.
There are some great articles on Helium to help with correcting information in your credit reports and increasing your credit scores. Search for "Improving Your Credit Score" and "Disputing Credit Information" and you'll find plenty of reading material. You can also visit the forums on creditboards.com for information.
My credit scores were bad but overall my credit history was good. By learning what needed to be changed and researching how to correct it I was able to substantially improve my scores in a short period of time. More severe credit problems can take more time to correct but the key is getting started on the road to credit repair sooner rather than later.