Don’t apply for a lot of new credit at once – Making lots of credit applications in a short period of time will severely dent your rating. Every time you apply for credit, the potential creditor will make an official ‘inquiry’ to check your credit history, and about your 10% of your Fico score is based on how many inquiries are made on your file. (Note that this doesn’t include inquiries you make yourself.)

Don’t apply for credit you have no chance of getting – Unfortunately, the expression ‘it never hurts to try’ doesn’t hold water when it comes to obtaining credit. Creditors tend to think alike, and when they see one (or more!) of their competitors has turned you down, it makes them think twice about approving your application. The best way to ensure you don’t get rejected is simply to call the issuer and ask them if you meet the eligibility requirements.

Credit begets Credit – While it’s vital that you never miss payments on your existing credit accounts, the fastest way of increasing your credit score is successfully applying for new credit and demonstrating you can use it responsibly. Even if you can only get secured credit cards, it’s well worth the trouble.

Beware of credit repair scams – As well as wasting your money, so called ‘credit repair’ agencies can often end up damaging your credit rating even further, or even get you into some legal trouble! Check out the Federal Trade Commission’s page on Credit Repair scams for more info here. 

Spread the love – I’ve already mentioned that your credit utilization is one of the key factors in determining your credit score. A high utilization makes potential creditors nervous and harms your score. By rearranging your debt, you can reduce the percentage of credit you have utilized on any single account, and thus improve your credit score without actually repaying any debt.

For example, let’s assume you have 2 credit cards – a Bluecard and a Redcard, both with credit limits of $1000. You currently owe $900 on your Bluecard and $100 on your Redcard, putting you at 90% and 10% credit utilization respectively. By transferring $400 from your Bluecard to your Redcard, you now owe $500 on both and are utilizing 50% of the credit on each card. Even though your TOTAL credit utilization never changes, you have brought down the utilization on your Bluecard down from a ‘danger level’ of 90%, making you seem like less of a risk to potential lenders.   

Stay tuned for part 3!

Related posts:

1. 15 ways to improve your credit score!
2. 15 ways to improve your Credit score (Part 1)
3. Shedding Debt vs. the Credit Score
4. The Business Credit Score
5. Credit Score Strategy: Paying in Full vs. Credit Limit Increases