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Protecting and Improving Your Credit Score

Lenders look at your credit history when deciding whether to lend you money. Your credit history also affects the interest rate you pay. Landlords and employers can, with your consent, look at your credit report before signing your lease and hiring you for a job. And by regularly checking your report you can make sure you haven’t been the victim of identity theft.

To improve your credit score:

  • Pay bills on time. The best thing you can do to improve your score is to pay your bills on time. Paying the minimum payments on time will improve your score more than not paying at all. Missing a payment entirely is the worst thing you can do for your credit rating,

  • If you have missed payments, get current and stay current. The longer history you have of paying your bills on time, the better your score will be.

  • If you have been managing credit for a short time, don't open a lot of new accounts too quickly. New accounts will lower your average account age. People who have had accounts for longer periods of time and have paid them on time tend to have higher scores.

To protect your credit score:

  • Order copies of your credit report to make sure the information is complete and correct. Mistakes happen, and you don't want bad information to prevent you from borrowing money in the future.

  • Correct mistakes. If you find any mistakes, report them to the credit reporting agency in writing. Follow up to make sure that the credit reporting agency makes the corrections. Negative information will hurt your credit whether or not the information is accurate.

  • Remember, it's okay to request and check your own credit report. When you request your own report, it is considered a consumer inquiry. This won't affect your score, as long as you order your credit report directly from one of the credit-reporting agency or through an organization authorized to provide credit reports to consumers. You are entitled to one free credit report from each credit bureau once a year; after that there may be a charge to get additional credit reports within that year.

  • Do your rate shopping for a loan within a focused period of time. If you are shopping around for a car loan or a mortgage loan, the closer together your credit inquiries come the better. For example, for car loans or mortgage loans, FICO counts all rate inquiries in a two-week period as a single inquiry.