Fastest Ways to Improve Credit

Your credit score is calculated using a formula created by the Fair Isaac Corp. As a result, your credit score may be referred to as your FICO score. Five factors determine your credit score: your payment history (35 percent), the amount owed (30 percent), the age of your credit history (15 percent), the different types of credit you have (10 percent) and the inquiries, or amount of new debt you apply for (10 percent). Raising your credit score takes time and effort, but there are some quick tips to help you raise your credit score in certain circumstances.

Pay Down/Distribute Debt

If you can pay down your debt, your debt-to-credit ration will improve, and this makes up 30 percent of your score. If paying down debt quickly isn't an option, try to distribute your debt among the credit available to you by using balance transfers (although there is usually a fee associated with this). You will have a higher credit score if you owe $50 on 2 credit cards, each with a $100 limit, then if you owe $100 on a card with a $100 limit, even though ultimately you owe the same amount. So, if you can distribute your debt, you will have a lower debt-to-credit ratio. Raising your credit limits on cards that carry balances also lowers your debt-to-credit ratio. However, you should only raise credit limits if your creditors will do this without pulling your credit report because a "pull" or inquiry on your credit report can lower your score. It is also not a good idea to open new cards to distribute debt because this lowers the average age of your credit cards and results in new inquiries.

Talk to Your Creditors

If you have a single late payment on one or more of your credit cards, and you have a good relationship with those creditors, you may try to ask your creditors to remove the late payment from your credit report. Even a single payment that was 30 days late or more can adversely affect your payment history, which makes up 35% of your credit score. Some creditors will remove a single late payment from your record as a good-faith gesture if you are a generally responsible customer.

Become an Authorized Signer

If someone with good credit lists you as an authorized signer on one or more of their credit accounts, this can make a quick and significant improvement in your credit score. When you become an authorized signer on a credit card, you aren't subjected to an inquiry and you don't have a new account listed. Instead, your credit score benefits from the positive credit account. If the credit card is an old one, it can also raise the average age of your credit (15% of your score). If the card has a high limit and a low balance, your debt-to-credit ratio will drop. If the card has a history of on-time payments, it can help your payment history (35% of your score).