Q:

How do you improve your credit?

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Quick Answer

To improve your credit score, keep your balances low, pay on time, only apply for new credit when it's absolutely necessary, and ask creditors to correct mistakes on your report. These techniques can improve your score in as little as 30 to 60 days, according to Forbes.

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Full Answer

Credit scores take into account five categories of borrowing behavior. A consumer's payment history and the amounts owed on revolving debts factor the most heavily on scores, accounting for a total of 65 percent of the scoring model. Even if you pay off your credit cards every month, Forbes recommends never using more than 30 percent of your available credit limit at any one time. Using only 10 percent of your limit produces the best results.

The longevity of your credit history accounts for 15 percent of your score, and new credit inquiries account for 10 percent. Frequently applying for new credit can harm your score, so Experian recommends applying only when you need a new credit line rather than opening a new card at every store. If you have little-used cards with no balances, keep them open because their longevity and unused limits improve your score. Order a free credit report every year, and dispute mistakes through the credit bureaus or individual creditors.

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