The Best Way to Raise your Credit Score

Susan wrote in earlier this week with a common question:

What is the best way to raise my credit score?  Is it paying off old debts or is it paying on time that raises it?  I have old debts and my credit report and I have old items on it.  I was told if I cleaned it up it would help me.  How do I do this?

There are so many myths out there about what will and will not help your credit score. Here's a list of things that will and will not help your credit:

Good for your credit score:

• Using credit cards responsibly
• Paying off your debts
• Paying your bills on time
• Having a mortgage and/or car loan
• Keeping positive accounts open for a long time
• Having high credit limits

Bad for your credit score:

• Carrying high balances on your credit cards
• Paying late
• Closing old accounts
• Reducing your credit limits
• Collection accounts, judgments and bankruptcy filings
• Applying for credit too often

There are also other changes that could be good or bad depending on your own credit history. The best way to see which changes will improve your credit the most, is to use a credit score estimating tool. Start by entering your current credit data to accurately estimate your score. Then, adjust the factors to see how your score would go up or down.

Emily Davidson – Credit.com's Financial Expert and former TransUnion credit insider. Emily writes about credit reports, credit cards, loans and personal finance as the CreditBloggers.com moderator.