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There are many different points of view and perspectives when it comes to improving credit histories. Here are a few tips that can help you if you’re looking to overcome bad credit and to raise your FICO, or “beacon” score.

Keep in mind that every reporting agency, such as Equifax, Trans Union, Experian and so on, have their own standards and algorithms that they use in determining a score. Furthermore, this causes your score to vary from one company to another.

These are basic tips that you can use to help you to improve your rating, although they are not legal or official financial advice. Consult with your own credit counselor or attorney if you are seeking legal advice.

1. Pay your bills on time. While this is one of the most basic and common sense tips that can be offered, it is also the most effective. Nothing will help to improve your rating with all three bureaus than simply paying your bills on time. This will take time to see an affect, however it is the most simple and effective means to an end.

2. Reduce credit card debt. Many have maxed out credit cards that have very little available credit. When a company or potential creditor pulls your report from any of the three bureaus, they undoubtedly see maxed out cards as being a sign of dependency on credit to live. Being dependent on credit can be a very dangerous thing, and in the eyes of lenders it is a sign that you are having a difficult time meeting your current obligations.

3. Keep credit cards open. When you pay off an account, keep that card open. Having the availability of credit, or “available credit” on your report shows that you are living in contrast to tip number one. This shows that you have access to it if you want it, but are not living day to day being dependent on it.

4. Get a good auto loan. When you do buy a car with bad credit, make sure that you use a company that will report to the three major bureaus. In contrast, buying from a dealer that finances cars in house, will not give you these benefits. By making your payments on a timely basis, your score will improve.

5. Settle all collection accounts. If you happen to obtain a copy of your report, make sure to contact any and all companies that you have a collection account with and ask them what they will accept as a percentage of your total debt owed to them. Frequently, companies will accept an amount as little as twenty five percent of the total debt and will then report a zero balance for the account in your report. This will make a big difference quickly on your total score.

6. Make a budget. By planning out your monthly bills and expenses, you’ll be ahead of the game. A large percentage of people don’t do this, while it is so important. How can you get out of debt or make sure you have money available for unexpected expenditures if you don’t know exactly what your income vs debt ratio is? It’s a very wise idea to make and plan a budget, then stick to it. You may be surprised to find how much money you actually have available, if you are simply more responsible with it.

That concludes this article on tips for improving a bad credit score. Although they are very basic and a common sense approach, you’ll find that they are highly effective in raising your total score, with all bureaus.

Maybe with a little time, planning and effort… the next time that you apply for credit, you’ll be in a much better position.