10 Ways to Improve Your Credit Score Instantly

April 4, 2011— -- I'm like the doctor who's always getting approached at cocktail parties by people who want free medical advice. Only my friends, family and co-workers are after consumer advice.

Actually, I don't mind a bit, because living vicariously through these queries helps keep me up to date on real issues that real consumers are facing.

Recently, a co-worker, who shall remain nameless, started pinging me about once a week with credit questions. Turns out he wants to buy a house and he's doing everything right, by taking a hard look at his credit well in advance of the purchase.

That puts him in a position to raise his credit score so he can get the best possible interest rate when the time comes to take out a mortgage.

My co-worker was going round and round with a debt collector who was trying to collect an unpaid bill for one of those music subscription clubs, where you get a CD in the mail every month. Turns out, way back in college, one of his roommates had signed up in his name then not paid. No surprise, he couldn't get the collector to believe his story.

Fortunately, he doesn't really have to persuade the collector. What my co-worker was trying to accomplish was to get the unpaid debt removed from his credit reports.

For that, you don't have to deal with the original merchant or their hired gun collector. All you have to do is dispute the item with the three major credit bureaus that keep credit reports on all of us: Equifax, Experian and TransUnion.

I advised my co-worker to approach the three bureaus and simply state that the music account was not his. No need to go into the whole story about the roommate, which might give them wiggle room to blame him for having bad roommates.

The way I saw it, this was a fraudulent account, pure and simple. Identity theft. So what if he knew the guy?

It worked. Within hours of filing his dispute, one of the credit bureaus had removed the account from his report and we expect the others to follow suit.

Here's why that's such a victory; because your all-important credit score is calculated using the data in your three credit reports. Erroneous, unflattering information can drag down your score. Indeed, in my co-worker's case, when that one small black mark was removed, his score jumped up from 648 to 689.

Look for Credit Report Errors

So here's what you do. Go to the government-mandated website www.annualcreditreport.com to get your three free credit reports from the major bureaus. If there are inaccurate, unflattering entries on your report, simply fill out the form provided to dispute them.

Pay particular attention to the following kinds of errors, which can drag your score down most of all:

Old Bankruptcies

Debts Disposed of in Bankruptcy

Outdated Lawsuits and Judgments

Inaccurate Tax Liens

Outdated Demerits

Duplicate Debts

Your Spouse's Bad Debts

Other People's Accounts

Old Credit Applications

Credit For Which You Didn't Apply