Improve your credit report, score Published March 17, 2009 By Army Capt. Nick Mitchell 87th Air Base Wing legal office FORT DIX, N.J. -- The best way to improve your credit score is to avoid doing things that lower it. Every time you apply for credit, make a payment, or miss a payment, you add information to your credit report that affects your credit score. One of the best ways to improve your credit score is to improve your record of paying on time. Check your bills to see when payments are due; it may be sooner than you think. Late fees and penalties add up quickly and make it harder to pay the balance. Pay as much as you can on every account and never less than the minimum. Your credit score also considers how much credit is available to you and how you use that credit. If you regularly charge close to the maximum on a credit card, you will hurt your credit score. If you apply for store credit to get a special discount, you may harm your score, even if you do not use the store account often. Opening a new account and transferring your existing balances to the new account will not improve your credit score. When you shop for a loan, each lender will check your credit history. Every inquiry is listed on your credit report. The credit-scoring system sees too many inquiries as a sign of risk. You can avoid this problem by comparison shopping within a short period of time. If you make several inquiries about one type of loan, say a motor vehicle loan, within one month, FICO (the most widely used credit-scoring system developed by the Fair Isaac Corporation) counts this as only one inquiry. When you check your own credit report(s), you do not harm your credit score. A bankruptcy or series of late payments can quickly lower your credit score, and it will take time to recover. Credit-scoring formulas give more weight to recent positive history, and older poor credit performance eventually fades away. The bottom line is: Ensure every payment is on time, ensure you make at least the minimum payment on bills, and don't overextend yourself to keep your finances and credit score on track.