Check your credit report - Improving your credit score begins with your credit report. Request a copy of your credit report and check it for errors. Under the Fair Credit Reporting Act you are entitled to request a free report from each of the three credit reporting agencies every 12 months. Your credit report contains the data used to calculate your score and it may contain errors. In particular, check to make sure that there are no late payments incorrectly listed for any of your accounts and that the amounts owed for each of your open accounts is correct. If you find errors on any of your reports, dispute them with the credit bureau and reporting agency.
Pay your bills on time - Your payment history accounts for about 35 percent of your score. On-time payments mean a higher score. Late payments, delinquent or overlimit accounts, bankruptcies, and liens will significantly lower your score.
Increase the length of your credit history - This accounts for about 15 percent of your score. The length of your credit history shows how long you have been using credit and how you have managed your finances in the past. The longer your credit history, the better, so avoid closing accounts which have been opened longer, even if you don’t use them.
Keep your credit card balances low - Keep the amount you borrow below 25 percent of your available credit limit. This accounts for about 30 percent of your credit score.
Minimize the frequency of new card requests - This accounts for 10 percent of your score. Applying for a lot of credit in a short period of time can lower your score.
Diversify your credit - This makes up the remaining 10 percent of your score. Keep a combination of different types of installment debt (such as car loans and mortgages) and revolving debt (like credit cards). Having credit cards is a great credit builder, but lenders want to see that you can manage other types of credit as well, such as installment loans and mortgages.