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Obtain a free copy of your credit report from the Annual Credit Report website. Read your credit report and highlight each of the negative items on the report. These might be accounts that are currently past due, late payments from the past few years, recent credit inquiries or high balances on your credit cards.
Write a dispute letter to the credit bureau for each piece of inaccurate information you find on your credit report. For example, if your report shows you had a 60 days late payment on a store credit card, but you have actually always paid that card on time, write a dispute letter. The Federal Trade Commission provides a sample letter and more information about disputes.
Make payments to creditors and debt collection agencies to get current on any accounts for which you are currently past due. If you cannot afford to make payments, call the creditors and try to negotiate a lower payment plan. When making a payment to a collection agency, ask if it will notate the account as "paid
as agreed" rather than "charged-off debt."
Sign up for automatic monthly payments on all of your credit accounts. If you have had missed payments in the past, developing a history of consistently on-time payments helps your credit score over time.
Lower your credit utilization ratio. This is the ratio of revolving credit you are using to your total credit line. For example, say you have a card with a limit of $8,000 and outstanding balance of $4,000. Your utilization ratio on this card is 50 percent. If you can pay down the card so its balance is only $2,000, your ratio drops to 25 percent. If you don't pay down the balance, but instead call the credit card company and get it to increase your credit line to $12,000, your ratio drops to 33 percent. If you do both of these, the ratio goes down to 17 percent.
Keep using your oldest credit accounts and avoid opening new credit accounts. Part of your credit score looks at your average account age, so the longer you have had each account, the better.