15-minute fixes for your credit score

By Allie Johnson

Improving your credit score can feel like a gargantuan task. But by spending just 15 minutes, you can give your credit score anywhere from a small bump to a major boost. Here are some tips from credit experts on quick -- and sometimes easy -- ways to raise your score.

1. Set up automatic bill payment or alerts. "The one thing you need to do is pay bills on time -- that has the biggest impact on your score," says Carrie Coghill, director of consumer education for FreeScore.com. One way to do that is to set up automatic bill payment through your bank or credit union, at least for the typical minimum amounts of your bills, says Lita Epstein, author of "The Complete Idiot's Guide to Improving Your Credit Score." Or, if you're not comfortable with automatic bill payment, Coghill recommends setting up regular email or text message alerts to remind you of bill due dates. On-time payments over a period of about six months can increase your score by as much as 50 points, says Epstein. "It shows you are getting responsible about your bills."

2. Pay down revolving debt. If your credit card debt is more than 35 percent of your credit limit, it's probably dragging your score down, but paying balances down can provide a quick boost. Experts recommend setting up regular automatic payments to make a dent in your debt or making one big extra payment if you can sell something on Craigslist or eBay or if you get a windfall. "People sometimes get a sizeable tax refund. I recommend using that to pay off debt," says Doug Borkowski, director of the nonprofit Iowa State University Financial Counseling Clinic. A good rule to follow is this: For every $1,000 of available credit, try to use less than $350, says Clifton O'Neal, a spokesman for TransUnion. "Say you have three cards, each with a $1,000 limit," O'Neal says. "One has a $500 balance, one has a $350 balance and one has a $250 balance. Pay on all of them, but pay more on the first one to bring it down under 35 percent."

3. Pay your credit card bill early. If you use your card for everything from groceries to utilities to a pack of gum to get rewards -- but pay in full each month -- pay early. Because if you charge, say, $2,000 each month, but pay your bill after you get your statement, it looks as though you're carrying a large balance when you're not, Epstein says. "Check when the statement closing date is," Epstein says. "Making the payment before the statement closing date -- just five or six days early -- can make a big difference over time. It will be reported to the credit bureaus as a $0 balance and will look like you're holding less credit."

4. Ask your credit card company to raise your limit. If you carry a credit card balance but have been making payments on time and make enough money to support a higher credit limit, a quick phone call to your credit card company could raise your score. A higher credit limit will lower your credit utilization ratio (the amount of available credit you're using), experts say. However, experts also say it's important to be honest about whether that step would tempt you to rack up more debt. "It's about knowing yourself, asking, 'Am I going to be responsible using that credit card?'" Borkowski says. "Because what if your limit is $4,000 and it gets raised to $8,000 and all you end up with is more credit card debt? But, for those who can handle it, yes, call and try to get your limit raised so you're at a one-third or less [credit utilization ratio]."

5. Go online to dispute an item on your credit report. Some experts advise consumers to dispute a possible credit report error by registered mail, and to include evidence. But, let's face it, many never get around to making copies, hunting down a stamp and heading to the post office. All three major credit bureaus offer the option of filing a dispute online -- and it can be faster and easier, experts say. "The first thing to do is pull a copy of your credit report from all three bureaus. You can do it free once a year at AnnualCreditReport.com," says O'Neal. "Look at each one and see if there's anything you don't recognize. If you have any questions about information on your reports, you can file a dispute online. You can track it online, too, so it's a lot quicker."

6. Just say no to too many inquiries. When you're buying those cool new sunglasses and the cashier asks if you'd like to get a 10 percent discount by signing up for a store credit card, just say no. "Whenever you take new credit, you get a ding on your credit score, so don't apply for new credit cards all the time," Epstein says. In fact, she recommends applying for new credit, at most, twice a year.

7. Get a late payment removed from your credit report. In the "it-can't-hurt-to-ask" category, it sometimes pays to call a creditor and ask to have a late payment removed from your credit report. "I always say, 'just ask,'" says Borkowski, who recommends asking for the hardship department whenever you call a credit card company to make such a request. "A lot of times, general customer service might say they can't help you, but the hardship department -- or its equivalent -- might," Borkowski says. "They make a lot of money from the person who misses a payment every now and then but carries a big balance. They like to keep those customers."

8. Play what-if with your credit score. Each consumer's credit history is different, so Epstein recommends spending a few minutes at the consumer website CreditKarma.com, The site offers a peek at your credit score -- though it's not the widely used FICO score -- and offers a simulator that allows you to see how different actions you could take would likely affect your score. "I use it all the time. I see whether my score is going up or down," Epstein says. "You can also go in a week after you've done something you think might have impacted the score, and you can see the change."

It is often repeated that, when it comes to credit scores, there are no quick fixes. However, if you follow these tips, you could see a big improvement in your credit score -- with just a small investment of time.

See related: How to dispute credit report errors, How your FICO credit score is calculated: Payment history FICO: Know what you owe

Published: July 19, 2011

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