Quickest Way to Improve Your Credit

Whether you're struggling with poor credit or just want to improve your credit score, it helps to know what to do and what to avoid. According to MSN Money, simple actions, such as opening too many new accounts, could be knocking points off your credit rating. Focusing on the areas that make up the largest percentage of your credit score will help you increase your rating quickly.

Instructions

1

Review your credit report. The first step to improving your credit is understanding where you stand. A free credit report can be ordered annually from Annual Credit Report. Review the report for errors such as inaccurate late payments or unfamiliar accounts. Also, look at the blemishes on your credit report that are correct. Late payments, high credit card balances and collection activity could be negatively affecting your credit.

2

Make timely payments. Payment history makes up the largest percentage of your credit score, according to MSN Money. This factor accounts for 35 percent of your rating. Try setting up automatic bill payments with your financial institution to ensure creditors receive payments on time. If you're struggling to make the payment, consider finding additional funds. For example, joining a carpool or cutting out your daily latt could save $100 or more each month. If you don't make at least the minimum payment, the creditor may put your account in default status.

3

Pay down credit card balances. According to MSN Money, paying down revolving accounts, such as credit cards and equity lines of credit, can have a serious affect on your credit. Aim to get balances paid down to 30 percent or less of the total available credit limit. For example, a credit card limit of $10,000 should have $3,000 or less on the card. If your credit card has a high interest rate, consider checking into balance transfer offers. These offers provide a low fixed rate for a specific term, such as 12 months. You can also ask your existing lender to lower your interest rate. Securing a lower interest rate will allow you to pay down your balance quicker.

4

Focus on using older credit cards. If you have old credit cards with a zero balance, consider switching use to those cards. According to MSN Money, length of credit history makes up 15 percent of your credit score. Aim to pay off the balance each month. Credit bureaus view older credit cards favorably because you have a long history with the company.