How to Rack Up Points on Your Credit Score

A high credit score gives you borrowing power because lenders see you as a good risk. Your score is determined by a proprietary formula by FICO, the oldest scoring company, and the Equifax, Experian and TransUnion credit bureaus. There are certain factors known to affect the number. You can rack up points fast if focus on improving your records in the most important areas.

Payment History

Your payment history accounts for 35 percent of your credit score. Catching up any late bills and paying all of your accounts on time racks up points on your score because of this area's heavy influence. Pay all of your accounts by the due date, even if you only send the minimum amount due. Set up an automatic withdrawal from your checking account to ensure you pay by the proper date or mail payments as early as possible to offset postal delays.

Account Balances

High account balances hurt your credit score, especially if most or all of your credit limits are maxed out. MyFICO recommends paying down your accounts so you have a more equal balance of owed money and available spending power. Create a strict budget that cuts out as much discretionary spending as possible so you can pay more on your bills. Your score goes up as the balances drop. Channel most of your extra funds toward your highest interest accounts, as that reduces the balances more quickly because more money goes onto the principal.

Old Accounts

Part of your credit score is based on the overall length of your credit history, and long-term accounts that have always been paid promptly raise your score. Keep older credit cards open, even if you do not need all of them. Consumer advocate Clark Howard recommends using those cards twice per year to show recent transactions on your credit report. Keep purchases low enough to be paid off immediately.

Mistakes

Dayana Yochim, a writer for the Motley Fool money management website, warns that up to 80 percent of credit reports have mistakes hurt your credit score. You have a right to find and dispute them, and you add points to your credit report for each negative entry you eliminate. The Federal Trade Commission website explains that you can order free Equifax, Experian and TransUnion credit reports yearly through annualcreditreport.com. The bureaus are obligated to process any disputes you submit in 30 days and correct or erase errors.