fico-score-basicsIf you’re thinking of buying a car or house, your FICO score is the ultimate three-digit number determining your approval. The interest rate that you have to pay also depends on it. Unlike a crash diet to help lose weight fast, there is no quick fix to improve your FICO score, and the best advice is to manage your credit responsibly and it will gradually change over time.

The easiest ways for improving FICO scores include getting a hold of your credit report, paying your bills on time and settling with debt collectors. This is mostly boilerplate advice so listed below are three surprising ways to improve your FICO score.

Clean Your Credit Report

Chances are that if you’re looking to improve your FICO score, you have a copy of your credit report handy. Scour through it for any activity that you may not be responsible for, and contact the credit-reporting agency for any errors.

You may be a victim of identity theft in which case your credit reports payment history, which accounts for 35% of your FICO score will be chock full of errors. These errors are also most likely to occur when someone else shares the same name as you so it is crucial to get them corrected as soon as possible.

Don’t Pay Your Bills At Once

Many individuals wait until payday to pay all their credit card bills, but this habit is to be discouraged. Making micropayments through the month will not only help you reduce your debt quicker, but lower your debt utilization ratio.

This ratio is calculated by the overall debt on your credit cards divided by the total credit limit available on all your cards, and accounts for 40% of your credit score. According to FICO, this number should be in the ballpark of 35%, and any higher is a reason for concern.

More Credit And Less Debt Will Improve Your FICO Score

If you’ve been using a specific credit card extensively, and are good at making the payments, go ahead and ask for a credit line increase. This will help you improve your credit utilization ratio. However, you shouldn’t opt for a credit line increase if you have bad credit as the bank may consider you as a credit risk and reduce your limit.

Common myth among credit card holders is that they have to carry debt on their card to build their credit score, which is not true. The reality is that the less credit you use the better it is even if you’re paying the bill off in full each month. The day your balance on your credit cards is reported to the credit bureaus depends on the specific lender, which may be when you’ve almost exhausted your limit.

Ideally it is recommended that you use 10% of your credit limit, but if you have to make bigger purchases, make more than one payment to improve your FICO score.

Your FICO score is based on the information provided in your credit report, and will take time to improve. That’s why it is a good idea to get your free annual copy of your credit report and monitor your progress.