Your credit scores can not only affect whether or not you get a mortgage loan, but also whether or not you get an apartment or a job. If you already have a job, you could end up being passed up for a promotion due to your credit. Employers are looking at credit reports more and more as a consideration in hiring qualified job candidates and promoting existing employees. Insurance agencies also use credit reports to help determine the rate you'll pay for your policy. And, of course, your FICO score determines the interest rates you'll pay for credit cards and loans like auto loans and mortgages.

If your scores are lower than you’d like to see them, here are five effective techniques for raising credit scores:

1. Paying down revolving balances - paying off installment loans doesn't help your credit scores nearly as well as paying down or paying off your credit card debt. A nice, big gap between the amount of credit you're using and your available credit limits really helps your scores by lowering your debt-to-income ratio. Plus, it shows that you don't owe your creditors a lot of money. Getting your balances below 30% of the credit limit on each card can really help. The best strategy is to pay the cards closest to the limits first, then working your way down.

2. Using your cards lightly - even if you pay your bills on time each month, carry balances that are too close to your credit limits can really hurt your scores. Try to maintain around a 30% of your credit limits or less.

3. Making sure your creditors are reporting your credit limits accurately - if you've recently gotten a raise in your credit limits, make sure it's properly reported. Some creditors don't report credit limits, so the bureaus typically use your highest balance as a proxy for your credit limit. This could artificially lower your scores.

4. Using old cards once in a while - The older your credit history, the better. But if you stop using your oldest cards, the issuers may stop updating those accounts at the credit bureaus. The accounts will still appear, but they won't be given as much weight in the credit-scoring formula as your active accounts, said Craig Watts, an executive at Fair Isaac & Co.

5. Disputing old negatives, inquiries and other inaccurate or unverifiable information - these include:
   • Late payments, charge-offs, collections or other negative items that aren't yours.
   • Credit limits reported as lower than they actually are.
   • Accounts listed as "settled," "paid derogatory," "paid charge-off" or anything other than "current" or "paid as agreed" if you paid on time and in full.
   • Accounts that are still listed as unpaid, which were included in a bankruptcy.
   • Negative items older than seven years (10 in the case of bankruptcy) that should have automatically fallen off your report.
   • Inquiries over 2 years old.

Removing errors and unverifiable information from your credit report is known as credit repair because you are "repairing" credit reporting errors.

Sometimes, you can also negotiate with a creditor if your credit report shows a late payment, especially if you’re a long-standing customer. A single late payment could lower your scores as much as 100 points. So, it won’t hurt to try it. And, paying off collections helps, but is much more effective if you can negotiate with the collector to have the derogatory item removed from your reports. Most collectors will do this if you offer them a full payment in return. Get it in writing, though. Have them fax a written promise on their letterhead indicating their agreement to remove the item.

Negotiating with your creditors and collectors to remove late payments and collections is called credit restoration because the information you are having removed is actually accurate and verifiable. It’s legal to do this, as indicated by the agency that oversees credit reporting, the Federal Trade Commission (FTC) as quoted below:

"The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete." They're referring to the Fair Credit Reporting Act (FCRA). The FTC also says, "There is no requirement that reporting agencies report information for the full seven years--they can delete adverse information whenever they choose before the seven year period." (FTC Official Staff Commentary §605 item 4.)