How can you improve your credit score?

It is virtually impossible to change your credit score in a short period of time.  But there are ways to make sure when you apply for a loan your score is as high as possible.

Be certain that the information on each of the three credit reporting bureaus  is consistent and up to date. Order a copy of your credit report about once a year, and dispute any inaccuracies.

Note: Theoretically, if a series of credit reports are requested on your behalf during a limited amount of time, your score goes down until time passes without any inquiries. Yet, changes in the law have made "consumer-originating" credit report requests not count as much. 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 credit bureaus and lenders realize that people request their own credit reports to keep up with what is on them, and smart consumers shop around for the best mortgage and car loans.

Unsolicited credit card offers in the mail do not count against your credit report, so do not worry.

The two main components of your credit score are your payment history and the amounts you owe. Bankruptcy filings and foreclosures, which can stay on your credit report for as long as 10 years, can significantly lower your score. It is never a good idea to take on more credit than you can handle.

Late payments work against you. It's extremely important to pay bills on time, even if it is only the monthly payment.

Do not "max out" your credit lines. Since the size of the balance on your open accounts is a factor, lower balances are better.

By carefully managing your credit, it is possible to add as much as 50 points per year to your score.