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SET GOALS HIGH DEBT LOW TO IMPROVE CREDIT SCORE SAN FRANCISCO CHRONICLE

Set goals high, debt low to improve credit score

A recent report shows the proportion of Americans who have FICO credit scores below 600 - a level that makes it nearly impossible to get loans - has risen to 25.5 percent, up from 24.1 percent two years ago. The likely cause: rising unemployment and bad debts.

At the same time, lenders are getting pickier about credit qualifications. A survey released this week by FICO, the Fair Isaac Corp., shows that 46 percent of bank risk managers expect approval criteria for credit to get stricter and only 14 percent expect criteria to be loosened.

If youre concerned about your score, here are some ways to improve it:

First, know your score. Although there are various types, most lenders still rely on FICO scores, which range from 300 worst to 850 best. The median, or midpoint, is about 711, FICO spokesman Craig Watts says.

The biggest factor in your FICO score is your payment history 35 percent followed by amounts owed 30 percent length of credit history 15 percent new credit 10 percent and types of credit used 10 percent.

VantageScore, a different score offered by the credit reporting bureaus, runs on a scale of 501 to 990. That means a 750 FICO score is better than a 750 Vantage score.

Pay on time. Pay any past...[more]