Debt Ratio

• Lower your debt ratio and quickly improve your credit. Debt plays a significant role in scoring because balances on credit cards and loans make up 30 percent of scoring. Consumers with no or little credit card debt may possibly have a higher rating than someone who owes several thousands of dollars on a credit card. Paying down debt requires self-control and consistency. Unless you are writing a lump sum check to erase your debt immediately, debt elimination takes time. Start with higher monthly payments and ask creditors to reduce your interest rate. Whenever possible, make larger payments (using tax returns or work bonuses) to reduce the balance sooner.
  
  

Payment Habits

• Another credit factor that affects scoring is payment history. This factor makes up 35 percent of scores, and frequently sending late payments or missing payments can have a detrimental effect on credit scores. Improving your payment history and credit history does require organization and careful planning. If you can't remember due dates and often send payments late, start paying creditors and lenders the day you receive the statement, if possible. Another option involves scheduling automated payment withdrawals from your bank account.
  
  

Remove Report Errors

• Don't ignore your credit report and allow mistakes to lower your credit score. Lenders and creditors may not update your file with correct information. Thus it's your responsibility to check your report at least once a year. Identifying mistakes and asking your creditors to correct their errors can add points to your score. Derogatory remarks in error that can severely damage your score include collection accounts, liens, 30-day late payments and judgments. Get your report from Annual Credit Report.
  
  

Rebuild Credit History

• Rebuilding credit is often key in improving a low credit score, especially after a bankruptcy. Failure to pay credit card bills may result in creditors closing your accounts and reporting the account as charged-off on your report. Negative information stays on credit reports for seven to 10 years. However, in the meantime, you can take steps to improve your score. Getting a secured credit card from your bank helps you reestablish credit. These cards do require a security deposit, and banks often start you with a lower credit limit (about $500), and then gradually increase the limit as you demonstrate creditworthiness. Paying a secured credit card on time each month slowly improves your score. In time, you can qualify for other credit cards and loans, which can also help improve your credit.