Three tips to improve your FICO credit scores

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Ask a Lender
March 18, 2016 | Updated September 22, 2017


Key Points

Improve your credit score

  1. Check your credit report
  2. Pay your bills on time
  3. Reduce your debts

Your credit score is really important in determining whether you can get a mortgage or any other loan.

Lenders use FICO credit scores as the primary tool to gauge how much risk they will take on with a borrower. It is not the only factor, but it pays to keep the score in mind. Borrowers with lower scores could be denied a home loan, or will pay thousands more over the course of a loan because of higher interest rates.

The typical borrower can find numerous websites that promise quick-fix solutions for boosting their scores for a fee, but the credit-reporting bureaus warn people to be wary of such claims.

It typically takes time and discipline to build, or rebuild, credit. Borrowers, however, can make good moves that will eventually make a big difference in boosting their scores.

Tips abound on how to do this effectively, but it’s probably best to hear it from the source. Fair Isaac Corp., which created the FICO credit score, has published several recommendations on how to improve your credit standing.

Following are the company’s tips:

1. Check your credit reports

The credit reports from the three major reporting agencies (Equifax, TransUnion and Experian) sometimes contain errors related to late or outstanding payments that can be disputed and removed. Reports can be obtained from each of the three agencies for free one time within a 12-month reporting period at

2. Pay your bills on time

A borrower’s payment history accounts for 35 percent of the FICO calculation. If the borrower misses a payment or is late, the delinquency can have a big impact on the score. Even if an individual has paid off a collection claim, it will stay on the person’s record for seven years. Older credit problems count for less in the calculation of the score, however, so strategically it is important for borrowers to get current on newer past-due bills first, and stay current.

3. Reduce your debts

A borrower’s debt accounts for about 30 percent of the calculation. The best way to improve this factor is to pay down credit card balances. Borrowers also can help themselves by consolidating balances under one or two credit cards and by consistently using just one or two credit cards — rather than keeping several small-account balances. Homebuyers shouldn’t try to move around the balances, close unused accounts or open new accounts as a short-term strategy to boost credit scores. Opening a number of new accounts rapidly will lower the borrower’s average account age and also could appear risky in the case of a new credit user.

The bottom line, according to company that invented FICO, is that borrowers need patience and discipline to boost their scores.

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