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How Can I Raise My Credit Score?

Pay bills on time &#8212 and don't forget those library fines

Q. I want to refinance my mortgage. How can I quickly raise my credit score and get a better interest rate?

A. There are no quick fixes, since credit scores reflect your history of payments. The good news: More emphasis is placed on recent information in your credit report than on older habits.

See also: Find your true credit score.

Paying bills before their due date is the first step, because paying on time represents about 35 percent of a FICO, the most widely used credit score. But how much you pay on a credit card balance is a close second, historically representing about 30 percent of the score but gaining increased attention in recent years.

So pay down balances as much as possible at least two months before you apply for a mortgage or other loan. If you can't pay balances off entirely, shoot to owe less than 50 percent of your credit limit on any individual card and no more than 33 percent of your limit on all cards combined.

Other ways to flex a FICO:

  • Don't open new credit accounts hoping for a better credit picture. That usually won't raise your FICO score and in some instances may lower it.
  • Avoid canceling unused credit cards, another practice that can backfire and lower your FICO score. Instead, keep them active but with zero balances.
  • Unresolved collections can produce a negative effect similar to late payments, so it's no time to have overdue library book fees, unpaid parking tickets or small bills you've neglected to pay. All of these can be referred to a collection agency and show up on your credit history.
  • Consider purchasing your credit score ($19.95 at before you start rate-shopping. By knowing it, you can better determine your likely interest rate — when calling for quotes, say, "My FICO is X. What rate would I get?" This will also help head off having lots of potential lenders checking your history at a credit bureau just to give you quotes you may never use — too many inquiries from lenders in a short period may lower your credit score.

You may also like: Understanding credit scores. >>

Sid Kirchheimer writes about consumer and health issues.