GOOD HOUSEKEEPING REPORTS: Improve credit score quickly

Proving you’re worthy of a low loan rate or a new credit card isn’t easy in today’s lending world.

Two years ago, a 620 on the 300-to-850 scale could have snagged a reasonable mortgage rate. Now you need at least 760 to get today’s best rate of 5.6 percent or so. You can boost your score without winning the lottery in as little as a month. Here’s how:

Get your current credit score: Most lenders use the so-called FICO formula, developed by banking consultant Fair Isaac Corp., because it’s considered the most accurate. Head to myfico.com and order a score ($15.95), based on your report from any of the major bureaus —- Equifax, Experion or Trans-Union. You’ll get it immediately, online. When you receive the number, you will see personalized advice tailored to your debt history and credit habits.

Pay off all you can: Lenders like to see that you’re spending within your means, which translates to using less of your credit limit. The lower the percentage the better, says Barry Paperno, a credit-scoring expert for Fair Isaac. Gradually paying off $2,250 of a maxed-out $2,500 limit could boost a 670 score to 750.

Ask your card issuer for a credit-line increase, too. If you get the increase but don’t charge any more, this move will lower the percentage of your credit limit being used.

Don’t be late: “Make sure your credit card bills are paid on time, even if you can only afford the minimum,” said Liz Pulliam Weston, author of “Your Credit Score: How to Fix, Improve and Protect the 3-Digit Number That Shapes Your Financial Future.” One skipped payment can knock 100 points off your score.

Piggyback on better credit: If your spouse has an account with a good, long history and a high limit, ask to be added as an authorized user. Authorized users don’t share liability for the debt, but the positive payment history gets factored into their score, says John Ulzheimer, president of consumer education for credit.com.

Curb credit cravings: Applying for a new card can tell financial institutions that you’re intending to take on new debt, says Ethan Ewing, president of Bills.com, a money-management Web site. There could be a 5- to 10-point credit score drop soon after you get a card, so consider waiting a few months before applying for a mortgage or car loan.

Remove errors: As much as 80 percent of credit reports have at least one error, according to bankrate.com. You can get a free report annually from all three credit bureaus. Pull one from a different bureau every four months at annualcreditreport.com to regularly comb for mistakes. If you find any, send bureaus correct information.

Don’t go “cash only”: It takes good borrowing behavior to reduce the impact of bad things such as maxing out a card. If you hit your limit, your score could drop 30 points in a month, but if you get the balance below 10 percent of the limit on that card, you can restore your score.

HOW TO CANCEL A CREDIT CARD

You may want to drop a card to resist overcharging, but service reps are often eager to keep your account open. Here’s how to pitch the plastic with one call —- vital even for a not-yet-activated card:

Start by firmly stating, “I want to close my account, and I am not interested in any offers to keep it open.”

If you’re promised a lower rate or a higher credit limit but don’t want either, tell the rep that if she can’t cancel your account, he or she should transfer you to someone who can.

If the rep is tenacious, explain that if your account isn’t closed, you will file a complaint with the Better Business Bureau.

Wrap up the call by requesting a letter from the card issuer showing that your account was closed, to avoid any misinterpretation.

Where to write: Good Housekeeping Reports, care of King Features Syndicate, 300 W. 57th St., New York, NY 10019.