How can you improve your credit score?

It has been, until recently, virtually impossible to change your score in the time between when most people decide to buy a home (or refinance their mortgage) and when they apply. So the short answer is, you really can't "on the spot." But there are strategies you can live with to make sure that when you apply for a loan that your score is as high as possible.

Recently, the credit bureaus have revised their policy and will allow a program known as Rapid Rescore. This program is not free but can make some quick and noticeable improvement to scores in some situations.

Make sure that the information each of the three credit reporting bureaus has is consistent and up to date. Order a copy of your credit report about once a year, and dispute any inaccuracies. Look carefully for any inaccuracies specifically related to credit limit and date that the credit was first created.

Theoretically, if a series of credit reports is requested on your behalf during a limited amount of time, your score will drop temporarily. Changes in the law though have however made "consumer-originating" credit report inquiries not count so much. Also, a series of requests in relation to getting a mortgage or car loan is not treated the same as a number of credit card requests in a limited time. This is because the credit bureaus, and lenders, realize that people request their own credit reports to keep up with what's on them, and consumers often shop for the best mortgage and car loans.

Unsolicited credit card solicitations in the mail don't change your credit score.

The two main components of your credit score are your payment history and also the balances and monthly payments you owe. Bankruptcy filings and foreclosures, which can stay on your credit report for 10 years, can significantly lower your score. It's never a good idea to take on more credit than you can handle.

Late payments work against you. It's extremely important to pay bills on time, even if it's only the minimum monthly payment.

Dont "max out" your credit lines. Since the size of the balance on your open accounts is a factor, lower balances are better. Keep your balance at or below 50% of your limit at all times.

It's said that by carefully managing your credit, it's possible to add as much as 50 points per year to your score.