What tips do you have for a person trying to increase their credit score quickly?

It is a step-by-step process that, for many young adults, begins with student loan repayment performance. It is also important to identify the financial services products that actually build credit. For example, debit cards do not, and credit cards do. And for those who may not be able to qualify for a credit card, there is the “secured credit card” route where the cardholder places on deposit with the card company a set dollar value, which then becomes the credit limit. As long as the card holder makes the payments, in full or in part, the deposited funds remain untouched and the cardholder’s credit profile is then “built.” If not, the deposit is used to repay the outstanding debt and the personal credit profile suffers.

What are some commonly held misperceptions about how credit scores are calculated?

FICO scores are the product of an algorithm that derives much (most?) of its data from our personal credit bureau reports. Those reports represent, in effect, the story arc of our personal financial lives in that the extent of our historical borrowings, recurring obligations (for example, cable/internet, cell phone, insurance premium payments), and the quality of all our repayment performances thereunder are all chronicled there. Consequently, I believe it is more constructive to view the resultant FICO score as a naturally occurring byproduct of all that.

Sure, many have talked about influencing FICO scores by limiting the number of credit inquiries, paying down revolving (credit card) balances, if possible, and double-checking credit bureau reports for errors (which you can do online for free), but I believe in playing the longer ball rather than reaching for a quick fix: Do not borrow more than you need or can handle, pay all your bills on time and monitor the accuracy of what the credit bureaus have to say about all that.

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Mitchell D. Weiss