How can I improve my credit score

How can I improve my credit score? This is a very common question that is asked quite often. There are many different factors that will impact your credit score, good or bad. One such factor, that is probably the most obvious, is making all of your payments for all of your bills on time. This has the single biggest impact on credit scoring of all other single factors. Payment history accounts for roughly 35% of your total credit score. If you do have derogatory credit or late payments in your credit profile, the more recent the late payments are, the more negative the impact will be on your credit score.

In a situation where you do not have credit scores due to lack of use of credit in the past, you can apply for a couple of credit cards and the three major credit bureaus will create a credit profile for you. However, it can take 3 to 6 months for the credit scores to show on your credit report. Always manage your credit in a responsible manner to get higher credit scores.

You should also have a mix of different trade lines. Limiting yourself to 3-5 revolving cards and installment loans such as an auto or home loan will result in a higher score than multiple revolving accounts alone. It is also important not to open and close credit accounts frequently. Transferring balances to new intro-rate cards may look attractive, but lenders also like to see aged accounts with perfect payment history.

Paying credit card balances down below 50% of the high-credit limit will help increase your credit score.

Correct blatant mistakes. Your credit score is only as good as what shows up in your credit report. Review your reports from all three credit bureaus for accuracy once a year as well as several months before applying for a loan. Changing a mistake on your report - such as a payment that is wrongly labeled as late -- can take 30 days to three months, sometimes longer.

If you are trying to establish credit to improve your score, getting a secured credit card from a local bank or credit union can establish credit history and be reported as a tradeline.

» DISCLAIMER: The information contained in this article on 'How can I improve my credit score' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.