Improve Credit Score

Do you want to know how to improve credit score? To improve credit score, you first should know what your credit score is based on.

Your credit score is based on five major things in your credit history:

    * 35%- Payment history
    * 30%- Amount you owe
    * 15%- Length of credit
    * 10%- Types of credit
    * 10%- New credit

Payment History & how payment history can improve your credit score

Your payment history is the frequency and amount you've paid on past debts.

In the event that a debt has been sent to collections it will stay on the credit record for 7 years. If you have a debt that has been in collections for 5 or so years (so it’s almost to the 7 year mark) do not just pay it off, because once you pay you will have “paid collections” on your credit record for another 7 years.

Instead of paying your old debt off and having a fresh entry on your credit report affecting your credit score, call the collections company and tell them you fully intend to pay the debt if they will write a letter to each repository (company that does credit reports -- there are 3 of them) telling them to expunge the collection once you have paid.

With their affirmative answer, you can then pay off the old debt. You have their word that it will not be on your credit report. This will improve your credit score. If you just pay off the old debt, it will make your credit score worse. Your payment history can either improve your credit score or make it worse.

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