10 Easy Ways for Students to Raise Their FICO Score

10 Easy Ways for Students to Raise Their FICO Score Why Students Need a Good FICO Score A FICO score is a type of credit score that is calculated with software from Fair Isaac Corporation (FICO).  Having a good FICO score is very important if you want to get approved for fair interest rates on private student loans, credit cards, and other sources of credit. FICO scores cant be improved overnight, but there are  10 easy steps that students can take to raise their FICO score Step 1: Establish New Accounts If you want to establish credit or raise your FICO score, you can get a credit card in your name and use it responsibly. This means charging regularly and paying the balances off regularly as well. If possible, get a card with a high limit and always keep the card balance below 25 percent. Step 2: Piggyback on Another Account If a parent or some other responsible individual is willing to add your name to their credit card account, it might help your credit and boost your FICO score. Every time this person charges and makes payments on the account it will look good for you. Read more about the legality of piggybacking. Step 3: Get Secured Debt If you are having difficulty getting approved for a regular credit card, try getting a secured credit card. These cards are perfect for those who have poor credit because they allow you to make charges that can be covered by money you have already applied to an account. There is no way for you to overcharge or miss payments. Eventually, use of the card will increase your FICO score. Step 4: Dont Apply for Too Much Credit If you have a flurry of credit inquiries on your credit history because you applied for 10 different credit cards and 5 different loans in a three-month period, it can lower your FICO score. If you can, try to limit yourself to two inquires each year. Step 5: Increase Your Current Card Limits The lower your balances are on your credit cards in comparison to the limit of your credit cards, the better your credit report will look and the higher your FICO score will be. If getting the balances paid down is proving to be a problem, or even if its not, contact your creditors and ask for a higher limit. Step 6: Pay Off Old Accounts If you have old, unpaid debts on your credit report, it can really drag your FICO score down. One of the best ways to undo the damage that has been done is to pay off old accounts and make arrangements with the creditors to have the judgments removed. Step 7: Dont Close Old Accounts Even if they are unused, old credit  accounts attribute to your length of credit history and affect your score. The longer you have an account, the better it looks. Closing old accounts can lower your FICO score even further. Step 8: Always Pay Bills On Time Not paying your bills on time is a sure-fire way to lower your FICO score. Each late payment can lower your score by as much as 20 points. In contrast, paying your bills on time consistently can raise your FICO score. Step 9: Lower Your Debt Having a significant amount of outstanding debt, such as student loans, cars loans, and other types of installment loans, can lower your debt-to-income ratio and in turn, your FICO score. If you can lower your debt; your FICO score will begin to rise at a fast pace. Step 10: Get Help If you are having a hard time managing your credit and raising your FICO score to an acceptable level, consider getting professional help through a low-cost or no-cost credit counseling service.