A credit score reflects credit payment patterns over time, with more emphasis on recent information. You can sign up for credit monitoring service to read a summary of what goes into your credit score.
Paying your bills on time is the most important contributor to a good credit score. Even if the debt you owe is a small amount, it is crucial that you make payments on time. In addition, you should:
Applications for credit show up as inquiries on your credit report, indicating to lenders that you may be taking on new debt. It may be to your advantage to use the credit you already have to prove your ongoing ability to manage credit responsibly.
It Takes Time to Improve Credit Scores
If you have negative information on your credit report, such as late payments, a public record item (e.g., evictions) or too many inquiries, you may want to pay your bills and wait. Time is your ally in improving your credit scores.
How Changes Affect Scores
One common question involves understanding how very specific actions will affect a credit score. For example, will closing two of your revolving accounts improve your credit score?
Simply closing two accounts not only lowers the number of open revolving accounts (which generally will improve credit scores), but it also decreases the total amount of available credit. That results in a higher utilization rate, also called the balance-to-limit ratio (which generally lowers scores).
One change actually affects many items on the credit report. It is impossible to provide a completely accurate assessment of how one specific action will affect a person’s credit score. This is why the credit risk factors provided with your score are important. They identify what elements from your credit history are having the greatest impact so that you can take appropriate action.
You build your credit history, which then is reflected by your credit score. The length of time to rebuild your credit history after a negative change depends on the reasons behind the change.