Pay your bills on time. Late payments can have a major negative impact on your FICO score and the longer you pay your bills on time, the better your score.
Pay down balances. High outstanding debt on credit cards can affect your score. It is better to pay off debt rather than move it around from one credit card to another. The most effective way to increase your FICO score in this area is by paying down your total revolving (credit card) debt.
Have credit cards - but manage them responsibly. In general, having credit cards and installment loans (and making timely payments) will raise your score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly. If you’ve never had credit or have a poor credit history, it might be difficult to get a regular credit card. In these situations, a secured credit card might be the only way to improve your credit standing. Secured credit cards are “secured” with a deposit that's held in an account and used when you default on your payments. Like many regular credit cards, secured credit cards have costs. Some of the most common costs include application fees, processing fees, and annual fees. Find out the fees for the secured credit card before applying. Stay away from cards with high fees that use most of your security deposit.
Additional Resources:
http://www.myfico.com/CreditEducation/ImproveYourSCore.aspx

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