This is not about the quick fix 20 point boosts by a Rapid Rescore or any tomfoolery, this is about the long-haul and how to maximize your credit scores over time.  No, that's not my screen shot to the left, or at the bottom of this post!

Start at the beginning:  for those that don't have a copy of their credit reports, Annual Credit Report is a site sponsored by all three monitoring bureaus, which is (in effect) federally mandated, and will give any consumer their credit report from each bureau for free once a year.  They don't give out scores though, only the reports that lead to the scores.  My Clean Start is a service that offers for-fee additional products, but also has a free service to get a free credit report and score every 90 days from an unnamed bureau (at least on their front page it's not named, but since it references the FICO score, I suspect it's from Equifax, who generates the FICO score through another company of theirs, Fair Isaac).  I thought there was a way to get this free once a year as well from My FICO but I haven't seen that jump out on their site lately.  When you get them take a good hard look to make sure things are accurate (like there isn't a collection on there you actually paid off or your mortgage company is reporting you are late on a payment when you aren't).

Disputing errors:  the three credit bureaus are Transunion, Experian & Equifax.  All three now have ways on their sites to dispute errors in any credit report.  In my experience, changing a consumer's bad payment history is hard to do, if it is the reality of what happened.  However, there are lots of things often on a consumer's credit report that are wrong or that the consumer just doesn't know about, like the department store credit cards they opened in college and don't even have or use anymore, but still show as open on their credit reports, which can be detrimental to their scores if it results in too many open accounts. 

In my experience, since the advent of recent legislation forcing the credit reporting bureaus to make their information more transparent to the consumers they hurt (help?), they have made internet-based disputes of errors on the credit reports much easier to take care of personally than to waste money on a credit repair service.  Most (not all) of what I know those credit repair services to do (for a large fee) is just dispute any bad credit report issue, and in some cases actually get it removed even if the reported delinquency was correct, such as a late payment from a credit card company, because the creditor doesn't always reply to their investigation in time to validate their original delinquency report.  However, this is also a more difficult strategy to get away with today than it used to be, because most of the credit card and other credit companies have fully automated this and their systems automatically and immediately reaffirm the delinquency report to the bureaus, so they never miss the 30 day response window that gets you off free.  Start by calling the credit issuer and asking them to fix it and if they won't, just protest it with each bureau online (see below).

The only way to really get something legitimate removed is to beg (I'm serious) -  call the individual creditors and try to get them to remove records of things such as late payments from their systems (a surprising number of them will agree to do if the consumer has a good track record otherwise, especially since that happened). 

Fixes you can put in place today:  each credit report should indicate the account number for each creditor and the contact information for the creditor, making it pretty easy to close unused accounts (or to pay off unpaid accounts that the consumer didn't even know existed, which happens a lot after someone moves and doesn't notify every creditor).  Closing and consolidating accounts, making sure payments (going forward) are all on time and correcting factual errors in a consumer's credit report are probably the three most effective ways to raise credit scores other than the obvious - pay down high balances. 

One big mistake people make is closing too many accounts.  That's right, if you don't have some accounts open it will hurt you, not help you.  The other thing people often get wrong is closing the old accounts and keeping new ones.  Bad move - the credit reporting agencies score you higher for long-seasoned accounts.  Close the new ones if you can.  If you want more credit, ask the old accounts to increase your credit lines (it won't hit your scores the same way a new account opening does) and close the newest accounts if you can.

One tip I have seen proven is that paying balances down to below 35% of their maximum is beneficial to scores.  Therefore, it is better to pay three different credit cards down to 35% than to pay off one completely and leave two with higher balances.  I think 50% is another hurdle on the way to 35%.  The point is this:  it's better to have several open accounts with small balances than several with zero balances and one with a high balance (as a percentage of the available credit for the account).

Another good tip is to opt-out of receiving unsolicited credit or insurance offers.  This alone can boost your scores as much as 20 points, as well as cut down on all that third-class "junk" mail you get at home (another benefit being that there is less for trash snoops to dig for and steal your identity information).  To do so call (888) 567-8688 or go to the online opt out registry. I understand that giving your Social Security number and date of birth are not required to process the request, however, these may ensure that the request is processed properly.  This opt-out is good for 5 years.

Going forward:  Subscribing to a credit bureau credit monitoring service (we like Transunion's TrueCredit 3-in-1 service with the scores) will usually provide not only credit reports and/or scores, but suggestions on how to improve them as reported by the credit bureau(s).  All three offer individual programs that monitor only their own credit reports and also offer 3-in-1 reports that monitor ones credit scores and reports from all three bureaus at a time.  These can be updated as often as every 24 hours.  There are different rates for getting one report vs. all three and for getting scores included instead of just the reports.  The whole enchilada costs $15 a month for all three plus the scores, not too steep for its value.  Note that the scores these monitoring services show are consumer scores, and for mortgages they each provide a slightly different score that cannot be monitored the same way (for example, FICO is the mortgage score that comes from Equifax, but will not be the same as the Equifax consumer credit score).  Just by subscribing and regularly checking your credit score/report you will almost certainly see your scores go up.  Why - they give you points for being credit conscious, and checking your scores through one of their (paid) services counts as doing that in their eyes.  Of course, the cynical might note that they are giving points to those that pay them money every month, but welcome to capitalism.

Also, the monitoring services also provide a nice feature that includes email alerts when someone has checked or changed something in a credit report.  This is helpful for a consumer to know if something got corrected, or more importantly, got erroneously reported wrong, or even to know if their credit is being checked without their permission or knowledge, since the frequency of the checking of one's credit by creditors or potential creditors is also punitive to credit scores (to the tune of about 3 points per bureau per credit check).

Whether you have been the victim of identity theft or not, I like keeping a fraud alert on my credit report.  Any credit bureau will put the alert onto the other two reports.  I use (800) 680-7289, which is TransUnion.  This only lasts 90 days at a time but will post to your credit report within a day and then lists your designated phone number for anyone that might issue you credit (or issue credit under your name inadvertently to an identity thief) and they will call you at that number before any new accounts can be opened in your name with your information.  If you have been a victim of identity theft, you can extend this for seven years, but you have to have a police report to get that put in place.

The last note to this long post is this: use your available credit, at least once in a while.  If you pay your balance off in full every month the day before your statement comes out you might think that will help your score, always being reported with a low or zero balance...not so.  My scores recently were on a bit of a plateau and then I used one card for a huge amount of purchases over a month or two.  After the second month of showing a sizeable balance (even when repaid in between) my scores went further UP, not down.  The agencies don't want you to have no use of credit, they want responsible use of credit.  (originally posted on Enoch's Blog on Angelic-RE.)