How can you improve your credit score?
Unless there are errors on your credit report, it's virtually impossible to improve 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." If there are errors on your credit report, you can get them corrected yourself (click the Disputing Credit Reports button) within about 45 days, or we can get them corrected in a week or less through the rapid rescoring process the credit reporting companies we purchase credit reports from offer. To use the rapid rescoring option we must have a written acknowledgement from the creditor, on their letterhead, stating that the information is incorrect.
There are strategies you can live with to make sure when you apply for a loan your score is as high as possible.
Make sure that the information each of the three credit reporting bureaus has on you is consistent and up to date. Order a copy of your credit report about once a year, and dispute any inaccuracies.
The two main components of your credit score are your payment history and the amounts you owe.
Late payments work against you. It's extremely important to pay bills on time, even if it's only the minimum monthly payment. I have personally seen a single late payment drop a credit score 100 points overnight. Consider that the next time you think you're too busy to pay your bills. That 100 point drop for a late payment could cost you literally 10's of thousands of dollars in extra interest payments on all your major purchases for the next 2 years.
Don't "max out" your credit lines. Since the size of the balance on your open accounts is a factor, lower balances are better. Don't close paid off credit cards either. The credit scoring models look at the percentage of your credit limits you are using. If you have three $10,000.00 limit cards with a balance of $10,000.00 on one and the others paid off, you will have a much higher score using only 33% of your available credit than the 100% you would be utilizing if you closed the paid off accounts.
Also, don't payoff old collection accounts. In the long run paying them may boost your score, but for the first couple of years after you pay them your credit score will actually drop! The collections will also stay on your credit report for 7 years after you pay them, so if they are already 6 years old and you pay them, they will stay on your credit report for 7 more years instead of disappearing in 1 year.