How do I improve my credit score quickly?

This is one of my favorite questions.  There are many things one can do to improve their credit score, but the most important thing I can tell someone is to just not get in over their head.  Make sure that anything they put on credit, they absolutely NEED.  (Not just "want.")  And then make absolutely sure that you make the payments ON TIME EVERY MONTH.  If you can't commit to making the payment every month, it is probably NOT a good idea to purchase the item.  By simply doing this, your credit score will skyrocket.

However, there are those that have made some mistakes in the past.  If you do carry a balance, the easiest and quickest way to get a little boost in your credit score is to call your credit card company and ask for a credit limit increase.  This may sound a little strange, but the math works out like this...

If you carry a balance of $1500 on your credit card, and your credit limit is $2000, you have $500 of unused credit, or 25% of unused portion of your credit.  If you are able to call your credit card company and have them raise your credit limit to $3000, well, your balance is still only $1500, but your unused portion of your credit is now $1500, or 50% unused credit.  (You just have to make sure you don't go and max out the new unused portion of your credit.

Some of the things that seem like they would help your credit score, actually can drag down your score.  For instance, if you have older collections, it seems like you would want to pay them off before applying for a new loan.  However, there are instances when it will actually hurt you.  The reasoning is because it was an older collection and had not been reported on for months, maybe even years, but when you pay it off, it now shows as new, even though its paid off.

My personal recommendation is to NOT use credit once it's established.  However, the only way to get a credit score is to USE credit.  So for most people, I would recommend a small auto loan, and make sure you make the payment every month.  Then get a small credit card, maybe $500 limit, and purchase only necessities, then carry a very small balance every month, $250, this will show that you understand how to use credit.  Even if your APR is ridiculously high, at 25% and you carry a balance of $250, your monthly interest payment will only be $5.21/month ($250 x .25 / 12 months = $5.2083333)  I personally, would consider $5.21/month a good investment in your credit, and in your future as a homeowner.