FICO, which stands for Fair Isaac Corporation, is a term which describes your personal credit score. That score is used by lenders who will determine if you qualify for a loan and the interest rate you’ll 
charged as well as the length of your loan. The higher your score, the more likely you’ll be approved for a consumer loan and receive favorable terms.
In these pressing economic times, not everyone has a good FICO credit score, which can be especially problematic if you need to apply for a consumer loan. Whether seeking a mortgage, a home equity loan/line of credit, car loan, credit card, or some other type of loan, you need to get the highest score possible.
Raise Your FICO Credit Score Step By Step
Fortunately, you can raise your score and see significant results within 2-3 months time. If you plan on applying for a loan some time over the next few months, the following steps can help you improve your FICO credit score:
Shrink those balances: You don’t have to pay off your credit cards, but running big balances is a red flag to creditors. Work on reducing your debt, a step which will gradually raise your credit score.
Don’t apply for too many loans: You may have unwittingly caused your credit score to drop by applying for too many loans in a short period of time. This can happen if you are planning to shop for a new car and are arranging your own financing. By applying to several different lending institutions for the sake of finding the best deal, you’ll be shooting up another warning flag to creditors. Find out the rate first, then apply.
Remedy credit problems: If you’ve been late making payments in the past, then your score will take a hit. Make payments on time and pay more than the minimum amount due each month. Get free copies of your credit reports and check them for errors; notify the credit reporting agencies if you find mistakes. They are required by law to fix mistakes within thirty days or that information must be automatically removed from your credit report.
Keep consumer accounts open: Odd as it may sound, closing a credit card or other consumer account will negatively impact your credit score. Simply tuck your unused credit cards away in a safe place and don’t use them again. You can gradually close them after you secure new credit, especially if you have no plans to borrow again in the near future.
More accounts means a reduced score: Opening more accounts will work against you. Only open up enough consumer accounts as needed.
Consider NOT moving your money around: Consumers have gotten into the habit of shifting outstanding balances from one account to another, but that move can actually reduce your credit score. Consolidating your balances to one account may cause your credit score to drop.
Building a good credit history is an achievable and laudable goal for any consumer. Take care of your credit score and your credit score will take care of you in the form of favorable lending terms for your next consumer lending opportunity.
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