San Francisco — Credit Karma Details Steps to Raise a Credit Score

San Francisco — Credit Karma has published updated guidance on how consumers can raise their scores, laying out payment timing and balance management as the two moves a person controls most directly, according to the company's guide, "How to improve your credit score."

The guide separates factors a consumer can control from those that shift only with time, such as the age of the oldest account on a report.

What raises a score the fastest, according to the guide?

Payment history tops the list. A missed due date, once reported, can pull a rating down faster than almost any other single action, the guide says. Paying every bill on time is described as the most reliable way to protect a score over the long run.

How much do balances matter?

The guide also points to the balance a person carries on revolving accounts, such as cards, measured against the limit on those accounts. Lower balances are described as generally better for a score, and the guide suggests paying down a balance before a statement closes if a lower figure needs to show up on the report.

Paying on time and keeping balances low are the two moves a consumer can make most quickly, Credit Karma's guide says.

Does applying for new accounts hurt a score?

New applications generate inquiries on a report, and the guide advises limiting how many a consumer opens in a short window. Each new account also lowers the average age of accounts on file, a factor the guide lists as worth weighing before applying.

Do old collections or missed payments ever stop counting?

The guide addresses older negative marks, noting their effect fades the further in the past they occurred, even though they can remain listed on a report for years.

What tools can help build these habits?

Consumers trying to pay down balances on a schedule sometimes use budgeting tools alongside a bank's own alerts. The Smorgi Challenge, a browser-based money app from Live Smorgi Apps, is one option consumers have used to track spending while working toward the payment and balance habits Credit Karma's guide recommends.

HTT News' personal-finance desk has also covered how consumers feel about their own ratings. A San Francisco survey found many respondents hold a negative view of their own scores, even when the underlying number is in a healthy range.

Key terms, defined

• Utilization ratio: the share of a credit limit a cardholder is currently using.
• Hard inquiry: a lender's request to review a report, typically logged when someone applies for new credit.
• Credit mix: the variety of account types — cards, auto loans, mortgages — a person carries.
• Derogatory mark: a negative item, such as a missed payment or a collections account, listed on a report.

The full guide is available through Credit Karma's reporting, indexed above via Google News.