How to improve my credit score?
It's virtually impossible to change your score in the time between when most people decide to buy a home or refinance their mortgage and when they apply. So the short answer is, you really can't "on the spot." But there are strategies you can live with to make sure when you apply for a loan your score is as high as possible.

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

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

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's 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's only the monthly payment.

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


Credit Score Breakdown

Payment History (35%): The first thing any lender wants to know is whether the consumer has paid past credit accounts on time.  This is also one of the most important factors in a credit score.  However, late payments are not an automatic "score-killer."  An overall good credit picture can outweigh one or two instances of, say, late credit card payments.  By the same token, having no late payments in the credit report doesn't mean the consumer will get a "perfect score."  60%-65% of credit reports show no late payments at all-- the payment history is just one piece of information used in calculating the score.

Amounts Owed (30%): Having credit accounts and owing money on them does not mean the consumer is a high-risk borrower with a low score.  However, owing a great deal of money on many accounts can indicate that a person is overextended, and is more likely to make some payments late or not at all.  Part of the science of scoring is determining how much is too much for a given credit profile.

Credit History (15%): The length of your credit history accounts for approximately 15% of the weight of the score.  In general, a longer credit history will increase the score.  However, even people who have not been using credit long may get high scores, depending on how the rest of their credit report looks.  .

New Credit Inquiries (10%) Research shows that opening several credit accounts in a short period of time represents greater risk-- especially for people who don't have a long-established credit history. This also extends to requests for credit, as indicated by certain "inquiries" to the credit reporting agencies, resulting from requests by the consumer for new credit. Credit scores do a good job of distinguishing between a search for many new credit accounts and rate shopping, which is generally not associated with higher risk.

Types of Credit Used (10%): This score will consider the mix of credit cards, retail accounts, installment loans, and finance company accounts and mortgage loans. It is not necessary to have one open of each, and it's not a good idea to open credit accounts not intended to be used. The credit mix usually won't be a key factor in determining the total score-- but it will be more important if the credit report doesn't have a lot of other information on which to base a score.