10 Easy Ways to Raise Your Credit Score

Is it 567? Is it 432? A perfect score is 850, but what exactly does that mean?

This mystifying number sticks with us through life, following wherever we go. Yet, most consumers have little to no idea how a credit score is achieved, let alone how to improve their score.

According to the Fair Isaac Corporation (FICO,) five factors are considered when calculating a credit score: payment history, length of credit history, new credit, types of credit used, and amounts owed. Your score depends upon how well you handle these areas over time.

So how do you best manage these areas and lift your score? Follow these ten easy steps and you will soon be close to the top of the credit score heap.

Request a copy of your credit report. Visit the Annual Credit Report website https://www.annualcreditreport.com to obtain your credit report for free, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion.

Addressaccounts that do not belong to you. If you spot an account on your record that you know does not belong to you, act immediately! Visit the FTC National Resource for Identity Theft http://www.consumer.gov/idtheft to find out how to handle the matter, or utilize information provided on the reporting company's website.

Resolve past due accounts and collection activities. If you have a past due account, remedy the account as quickly as possible to clear up this ding against your credit rating. If you have collections activity, verify that it's legitimate, remedy the account, or if it is not legitimate, work with the credit reporting agency to remove the information. You can also add a notion/explanation on your report regarding the circumstances/nature of why the debt remains outstanding.

Manage Unused Credit Cards. It may be tempting to close all your latent credit card accounts at once, but doing so can actually cause concern with potential lenders. Instead, close the accounts over a period of time, such as closing one per month.