Along with "to be or not to be" and "why did the chicken cross the road," "how do I improve my credit score" is one of those eternal questions that everyone asks and that also has no definite answer. Michael wrote in this morning to ask:

What is the fastest way to increase my credit score?  I am leasing a truck at the moment. I have been approved and received my first unsecured credit card (Capitol One). I have a Sprint cellular bill from 2001 and it has gone to a collections agency. Can I expect to have this account removed immediately from my credit report if i negotiate to make payments on the outstanding bill?   

There are a lot of factors at work on Michael&39;s credit score. The first step for improving a credit score is knowing what factors are causing the score to be low. Credit scoring is not quite as simple as this, but let&39;s divide them into that are helping his score and things that are hurting his score:

Helping His Credit Score
Auto lease (if being paid on time each month)
Credit card (if being paid on time each month and with a low balance)

Hurting His Credit Score
Inquiries from applying for the credit card
A short credit history
The collection account

Without knowing all the factors on Michael&39;s credit report it is hard to guess his exact credit standing. However, with a relatively short credit history and a few dings I would guess that he is in the low 600&39;s. 

Now let&39;s get to the improvement part! The most important thing Michael can do is to continue using his auto loan and credit card accounts responsibly. Paying his bills on time each month is crucial. And it is a good idea to keep the debt-to-limit ratio on that credit card around 10% (which means no balances over $500 for a $5,000 credit limit).  Keep these accounts open for a long time to build up your account history.

Paying off the cell phone collection record will probably not help boost Michael&39;s credit score significantly. The account will still remain on his credit report for 7 years, even if it is paid in full. However, paying off the collection record is still definitely the right thing to do and can help prevent future credit score damage. Michael should negotiate a reduced settlement with the collection agency and get their agreement in writing.

Time and good behavior are really the best recipe for credit score improvement. With some patience and hard work, Michael will be on the road to credit improvement very soon. When that collection record expires next year, he could have a credit score in the 700&39;s.