Last week, I spoke about FICO and what determines your credit score. Now, if you've already checked and found out that your score is on the low side or you've been refused credit, you might want to look into raising that score. Incidentally, like my friends at Wells Fargo like to say, "Raising your credit score is a bit like losing weight. It takes time and there is no quick fix."

The best advice is to manage credit responsibly over time. Follow these suggestions from the Fair Isaac Corporation, the creators of the FICO score:

Improve Payment History
Pay bills on time. Delinquent payments can have a major impact on your score. If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your score. However, keep in mind that even if you pay off a collection account, it will stay on your report for seven years. Contact your creditors if you're having trouble making ends meet. This won't improve your score immediately, but if you can begin to manage your credit and pay on time, your score will rise.

Lower Amounts Owed
Keep your balances low on credit cards and other revolving credit. High outstanding debt can affect a score. Pay off debt rather than moving it around. The most effective way to improve your score is by paying down your revolving credit. Don't close unused credit cards as a short-term strategy to raise your score. Owing the same amount but having fewer open accounts may lower your score. Don't open new credit cards you don't need, just to increase your available credit. This approach could backfire and lower your score.

Getting New Credit
Do your rate shopping within a specific period of time. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
Re-establish your credit history. Even if you'd had problems in the past, opening new accounts responsibly and paying them off on time will raise your score in the long term.

Managing Credit Types
Open new credit accounts only as needed. Don't open accounts just to have a better credit mix. There is no problem in having credit cards, but manage them responsibly. In general, having credit cards, and paying them on time, will only raise your score.

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