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How to Improve Your Credit Score
It is virtually impossible to change your score in the short period of time from deciding to buy a home or refinance your mortgage to applying for the loan. So the short answer is: you really can't change your score "on the spot." But there are strategies you can use to ensure that your score is as high as possible when you finally do apply for a loan.
Make sure that the information each of the three credit reporting bureaus has on you is consistent and up to date. Order a copy of your free credit report once a year, and dispute any inaccuracies. (How to dispute your credit score.)
Note: Theoretically, if a series of credit reports is requested on your behalf during a limited amount of time, your score goes down until more time passes without any inquiries. Generally, too many inquiries is a negative.
Changes in the law though have made "consumer-originating" credit report requests not count against you. Also, a series of requests in relation to getting a mortgage or car loan is not treated the same as a number of credit card requests in a limited time. This is because the credit bureaus, and lenders, realize that people request their own credit reports to keep up with what's on them, and smart consumers shop around for the best mortgage and car loans.
Unsolicited credit card solicitations in the mail don't count against your credit report either.
The two main components of your credit score are your payment history and the balances that you owe. Bankruptcy filings, tax liens and foreclosures, will stay on your credit report for as long as 10 years and will significantly lower your score.
Since late payments work against you, it's extremely important to pay your bills on time, even if it's only the minimum payment.
Try not to max out your credit lines because the size of the balance on your open accounts is a also a factor. Lower balances are better than higher ones.
The percentage of your outstanding balance to your credit limit is another factor. Try to keep that percentage as low as possible.
It is said that by carefully managing your credit, it's possible to add as much as 50 points per year to your score.
