Get Your Credit Score

• The first step in getting a high credit score is knowing what your credit score is now. You can visit experian.com, transunion.com and equifax.com to get a copy of your credit report. If you have been denied credit in the last 60 days, you may be able to get a free copy of your report.
  Review your report carefully and dispute any incorrect information.
  
  

Pay Your Bills in a Timely Fashion

• Once you know which debts are reported to the credit reporting agencies, make sure you make at least minimum payments to these creditors each month. Paying slightly more than the minimum is even better.
  Contrary to what you might expect, paying off your credit cards after a period of missed payments is not a good idea. Credit scoring is based on making a series of payments over a period of time. So even if you have the ability to pay off your credit cards all at once, it makes more sense to drop the money in a bank account and set up automated payments that pay down the debt in big chunks over six months or a year. You may pay slightly more in interest than you would if you paid off the debt, but your credit score will improve more quickly.
  If you have charge-offs, get new credit cards from department stores, make a few charges and pay those debts off over six to 12 months. The key thing is a track record of regular payments.
  
  

Reduce Your Debt to Income Ratio

• The amount of debt you have divided by your family's annual income is a key factor in determining your credit rating. If your consumer debt, which includes credit cards but not your mortgage payment, is $30,000 and your income is $40,000, you do not look like a good credit risk. If your debt is $30,000 and your income is $200,000 then you do look like a good credit risk.
  You can change either end of this equation. Increasing your income or decreasing your debt both work. In most cases, credit-card companies believe what you report as your income because lying to them about your income is a crime. They may, in rare cases, call your employer to confirm what you report as your income.
  If you can increase your income, perhaps through taking a better job, you may well see your credit score improve. If you can reduce your debt, you will improve your score.
  As your credit score improves, credit-card companies will start offering to lower your rate for balance transfers. Take advantage of those offers, particularly if they are good for more than a year. This will allow you to make the same payments but see a faster reduction in debt. Monitor the balance-transfer offers carefully to make sure promotional rates don't have hidden fees buried in them.
  
  

Don't Apply for New Credit

• The more credit cards you apply for, the more desperate you look to the credit-card companies. This lowers your credit rating.
  
  

Increase Your Score More Quickly by Finding New Lending Sources

• Using the techniques described above, it can take more than a year to see an improvement in your credit score. There are a couple of ways to make this process go more quickly.
  If you have parents, or someone else, willing to lend you the money required to quickly pay down credit cards at a favorable interest rate, this will let you improve your credit rating. This private lender is taking a huge risk because your improved credit rating may just let you borrow more than you can afford all over again. On the other hand, if you are paying 30% interest on your credit cards, you may well be able to give them 10% return on their money which is something banks and the stock market can match as an investment. If you know someone in a position to make this loan, and you are very confident you can and will repay it, this may be a good option for you to look in to. Remember that failing to repay the loan is likely to cost you that relationship, and may get you sued.
  There are businesses, like prosper.com, peer-lend.com, and pertuitydirect.com that match private lenders to those who need to borrow money to pay down debt. These peer-to-peer companies run standard credit checks for their lenders, they have minimum required credit scores and they report defaults to the credit reporting agencies, so they are not for those who do not want to repay their debts.
  
  

Improving Your Credit Score Requires Planning

• Understanding the factors that affect your credit score makes your score easier to control. It can take more than a year, and sometimes several years, to get a score over 800 which will give you the very best interest rates for mortgages, cars and other major purchases. But, from a financial perspective, it is one of the best investments you can make because it can save you and your family so much over the course of your lifetime.